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Michigan Credit Union League Home » Information Services » Publications » News Articles  

Sales Tax Reform Bills Signed by Gov. Snyder   (Misc News: November 11, 2013)

Buyers of motor vehicles, recreational vehicles or titled watercraft will now pay sales tax on the difference in price between price of the new vehicle and the trade-in.

Gov. Rick Snyder signed two pieces of legislation this week, Senate Bill 89 (PA 160 of 2013) and House Bill 4234 (PA 159 of 2013) to make the change. 

This package amends the General Sales Tax Act (1933 PA 167) so that sales tax would eventually be charged only on the difference between the price of a new or used motor vehicle, recreational vehicle, or titled watercraft and the agreed-upon value of any trade-in. Due to concerns over lost revenue, and to lessen the impact to the state budget, these bills will be phased in over several years. 

These bills are positive for Michigan and Michigan consumers, as they eliminate double taxation experienced when trading in a vehicle, RV or titled watercraft for the purchase of a different one. These bills will also help Michigan become more competitive, as Michigan was the only Great Lakes state, and only one of six remaining states, to still charge sales tax on the full price of a vehicle, RV or titled watercraft. The bills were given immediate effect.

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