Michigan Senate Bill SB0459

Michigan 2025-2026 Regular Session

• Introduced: 6/26/25
• Refer: 6/26/25

Caption

Individual income tax: credit; credit for certain user fees incurred to operate a vehicle on a public service facility; provide for. Amends 1967 PA 281 (MCL 206.1 - 206.847) by adding sec. 281.

Summary

Senate Bill 459 would amend Michigan’s Income Tax Act to create a refundable individual income tax credit for certain “user fees” paid to operate a vehicle on a public service facility. The credit would apply beginning with tax years on and after January 1, 2026, and would cover all qualified user fees incurred during the year. The Department of Treasury could require reasonable proof of the fees claimed. The bill defines a narrow class of eligible taxpayers: either residents of a township with a population between 10,000 and 15,000 in a county with more than 1,500,000 residents, or individuals whose predominant place of employment is in such a township. The credit is tied to periods when a public service facility is the only means of transportation to and from that township, and any credit amount exceeding a taxpayer’s liability would be refunded.

Impact

If enacted, the bill would add a new section to the Income Tax Act and create a refundable state income tax credit for a geographically limited group of taxpayers who pay specified vehicle-operating user fees. It would effectively reduce state income tax liability for eligible residents and workers, and could result in direct refunds when the credit exceeds tax owed. The bill also incorporates existing statutory definitions for public service facilities and user fees under the motor vehicle/public service facility law, linking tax treatment to transportation access conditions in a specific county and township class.

Sentiment

No committee transcripts or recorded votes were provided, so there is no direct evidence of legislative debate or formal support/opposition in the available materials. Based on the bill text alone, the measure appears targeted and relief-oriented, suggesting a policy intent to offset transportation-related costs for a narrowly defined population. Because the bill is highly specific in scope, sentiment may depend on whether lawmakers view it as a justified local tax relief measure or as a special-purpose tax preference.

Contention

The main points of contention are likely to be the bill’s narrow geographic and population-based eligibility criteria, the use of a refundable credit rather than a nonrefundable one, and the fiscal impact on state revenue. Supporters would likely emphasize fairness for residents and workers who must pay user fees because a public service facility is their only transportation option. Opponents may question whether the bill creates a special tax benefit for a small subset of taxpayers, whether the eligibility definitions are too restrictive or complex, and whether the state should subsidize these fees through the income tax system.