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Michigan Sales Tax for Road Repair


The Michigan Senate passed a bill today (SB 351) that would reallocate a portion of the sales tax collected on motor fuel to highway repair

The bill mandates that 18% of the sales tax collections from motor fuel sales go to the the State Trunk Line Fund, "for the purpose of matching federal aid highway funds as those federal funds are made available to the state." Currently the collections from motor fuel sales go to the state's general fund.

According to The Detroit News, this would redistribute approximately $135 million to highway maintenance annually. However, "This doesn't raise any taxes, this doesn't take away from schools or revenue sharing, it just redistributes funds from the general fund to roads and bridges," according to Lance Binoniemi, spokesman for the Michigan Infrastructure and Transportation Association.

Binoniemi believes that the bill is a good start, but notes that it doesn't make up the $1.4 billion per year Gov. Rick Snyder says is needed to repair Michigan roads.

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Avalara Author
Will Frei
Avalara Author Will Frei
Will Frei covers sales tax news including best practices, legislation and sales tax technology. He is the Social Media Manager at Avalara.