Michigan House Bill HB4979

Michigan 2025-2026 Regular Session

• Introduced: 9/17/25
• Refer: 9/17/25

Caption

Use tax: collections; application of use tax to advertising services; provide for. Amends secs. 3 & 21 of 1937 PA 94 (MCL 205.93 & 205.111) & adds sec. 3g.

Impact

The implementation of a use tax on advertising services is expected to have significant ramifications for businesses and advertising agencies. By treating advertising services similarly to tangible goods, the bill creates a new revenue stream for the state. This financial input is intended to bolster local government funds and aid in covering public service costs. Furthermore, the adjustments in tax provisions specify that the department of treasury will oversee the collection of these new taxes.

Summary

House Bill 4979 seeks to amend the 1937 Use Tax Act in Michigan by introducing the taxation of advertising services. The bill mandates a specific 6% use tax on the use or consumption of tangible personal property as well as newly specified services related to advertising, which includes the provision and distribution of advertisements through various media. This amendment aims to standardize how advertising services are taxed to ensure consistent application across the state.

Contention

There are points of contention regarding this bill, particularly revolving around the fair allocation of tax burdens among local businesses and the potential impact on advertising costs. Critics argue that taxing advertising services could disproportionately affect smaller companies that may already struggle with financial constraints. Conversely, supporters claim that this move ensures that all sectors contribute fairly to state revenue.

Fiscal considerations

The bill stipulates that revenues generated from the use tax on advertising services will be allocated to the Michigan transportation fund, in addition to other economic stabilization efforts. By beginning with the fiscal year 2024, an amount equal to the collections of the newly enacted tax will be deposited into the transportation fund, thus linking advertising revenue directly to state infrastructure finance efforts.