Michigan May Swap Sales Tax on Gas with Fuel Tax
- Sales Tax News
- Dec 8, 2014 | Gail Cole
In addition to fuel taxes, Michigan drivers currently pay the state’s 6% sales tax each time they fuel their vehicles. Fuel tax revenue funds roads and other transportation projects, while sales tax collected at the pump funds education and municipal revenue sharing programs.
Michigan roads are deteriorating. Data from the Michigan Department of Transportation suggests that current transportation revenue sources--fuel and vehicle registration taxes—are "insufficient to maintain the state’s road system in fair/good condition.” The proposed plan would increase transportation revenue without increasing the overall tax burden.
House Speaker Jase Bolger (R), who proposed the plan, points out that it “provides more funding for roads and bridges, protects schools and local governments from budget cuts, and protects Michigan taxpayers by not increasing their burden at the pump.” Protection comes from the fact that the legislation would “reinstate the full 6 percent sales tax if actual appropriations to school or local governments are decreased compared to the previous year” (MLive).
Yet Representative Doug Geiss (D) called the legislation a shell game. “If we take more money from our schools and our cities to solve the road funding problem, we haven’t really done anything.”
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