HB 5876 Michigan House · 2025-2026 Regular Session

Taxation: administration; settlement process; modify to reflect repeal of the state real estate transfer tax act. Amends sec. 21 of 1941 PA 122 (MCL 205.21). TIE BAR WITH: HB 5880'26, HB 5874'26

This bill amends Michigan's tax administration laws to update procedures following the repeal of the state real estate transfer tax. It primarily affects taxpayers and the Department of Treasury by establishing a formal, step-by-step process for resolving tax disputes before an assessment is finalized. Key provisions require the department to send a non-intimidating inquiry letter before assessing taxes, offer taxpayers an informal conference to discuss contested amounts, and allow for a written settlement negotiation between the taxpayer and the state treasurer. Additionally, the legislation mandates that all tax audits be conducted according to specific professional standards, including confidentiality, technical training, and independence.

Bill status passed both 4 of 5 stages cleared

Introduction

Apr 2026

Committee Review

Jun 2026

House Passage

May 2026

Senate Passage

Jun 2026

Governor

Introduced Apr 22, 2026 Last action Jun 2, 2026

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What changed between versions

House Introduced Bill → As Passed by the House · 6 edits · May 20, 2026

MODERATE

This bill amends Michigan's tax code to formalize a new informal dispute resolution process between taxpayers and the Department of Treasury. It requires the department to send a non-intimidating inquiry letter before assessing taxes, establishes a structured timeline for informal conferences and settlement offers, and creates a 'clean slate' rule where settlement negotiations cannot be used as evidence in future court cases. The changes aim to reduce taxpayer stress, encourage faster resolution of disputes, and increase transparency through semiannual reporting on settlement statistics.

Scope change

The scope of the dispute resolution process is expanded to include specific procedural safeguards and exclusions for certain tax types (like property and tobacco taxes), while the overall applicability to the Department of Treasury remains the same.

REQUIREMENT

Requires the Department of Treasury to send a courteous, non-intimidating letter of inquiry to taxpayers before assessing taxes, except in cases of clear non-payment or admitted liability.

Mandates that the Department of Treasury publish semiannual reports on the number and value of tax settlements to increase transparency.

Adds a penalty for filing frivolous protests or attempts to delay tax administration during the audit process.

TIMELINE

Establishes strict deadlines, such as a 60-day window for taxpayers to request an informal conference and a 21-day limit for submitting settlement offers after a conference.

ENFORCEMENT

Creates a 'clean slate' provision stating that settlement offers and negotiation details cannot be used as evidence in future court proceedings or appeals.

DEFINITION

Clarifies that the new settlement process does not apply to specific taxes like property taxes, tobacco taxes, and health insurance assessments.

Floor votes · House May 20, 2026

How they voted

This bill passed the Senate by voice vote (no roll call recorded).

Full legislative history

Actions timeline

Total actions

Key actions

Committee

Jun 2, 2026

Committee

REFERRED TO COMMITTEE ON GOVERNMENT OPERATIONS

upper

Jun 2, 2026

Upper · Passed

PASSED BY HOUSE WITH IMMEDIATE EFFECT

upper

May 20, 2026

Lower · Passed

passed; given immediate effect Roll Call #158 Yeas 57 Nays 46 Excused 0 Not Voting 7

lower

May 20, 2026

Committee

referred to second reading

lower

May 20, 2026

Lower · Passed

reported with recommendation without amendment

lower

Apr 22, 2026

Committee

referred to Committee on Government Operations

lower

Apr 22, 2026

Introduced

introduced by Representative Rep. Tom Kuhn

lower

1 primary · 17 co-sponsors