Bill > HB5880

This bill, titled the "Services Excise Tax Act," proposes to establish a new 6% excise tax on certain services, referred to as "covered services," beginning January 1, 2027, with the tax levied on the privilege of using or consuming these services within the state. The tax will not apply to services already taxed under the general sales tax or use tax acts. Service providers with a "nexus" (a sufficient connection to the state, determined similarly to use tax rules) are responsible for collecting this excise tax from purchasers, and if they fail to do so, they become personally liable for the uncollected amount, plus penalties and interest. If a service provider lacks nexus, the purchaser is directly liable for remitting the tax. The bill outlines definitions for key terms like "covered service," "department" (meaning the department of treasury), "person," "purchase price," and "service provider," and mandates that service providers register with the department and maintain records for four years. It also details procedures for tax collection, remittance, and enforcement, including penalties for non-compliance, and establishes the "property tax savings reimbursement fund" to receive the collected excise tax revenue, which will then be distributed to the state school aid fund and municipalities to offset potential property tax losses. The bill's enactment is contingent on the passage of several other related bills.

Government Affairs

https://legislature.mi.gov/Bills/Bill?ObjectName=2026-HB-5880