Michigan House Bill HB5359

Michigan 2025-2026 Regular Session

• Introduced: 12/11/25
• Refer: 12/11/25

Caption

Individual income tax: credit; credit for certain motor fuel retail dealers; provide for. Amends 1967 PA 281 (MCL 206.1 - 206.847) by adding secs. 279 & 679.

Impact

By supporting the sale of E15 and E85 fuels, HB5359 aims to promote the use of alternative energy sources within Michigan, potentially reducing reliance on traditional gasoline and mitigating greenhouse gas emissions. This aligns with broader state goals of improving air quality and promoting sustainable energy practices. However, the timeline for implementation from 2026 creates a window for retail dealers to adapt their business models in preparation. The impact on state tax revenue will depend on the extent to which these fuels are adopted and sold by retail dealers.

Summary

House Bill 5359 proposes amendments to the Income Tax Act of 1967 concerning tax credits for retail dealers who sell specific biofuel blends. The bill allows these dealers to claim a credit of $0.05 per gallon for E15 fuel and $0.085 per gallon for E85 fuel sold from January 1, 2026, to December 31, 2030. The intent is to incentivize the sale of these alternative fuels, which can have environmental and economic benefits. The credits are applied against the dealer's tax liability, and if the credit exceeds the liability, the excess will be refunded to the dealer.

Contention

Discussions surrounding HB5359 may include debates about the efficacy and impact of biofuels on the environment. Proponents argue that encouraging the sale of E15 and E85 fuels will not only foster a greener market but also stimulate economic growth through increased fuel options. Conversely, critics might express concerns about the actual environmental benefits of biofuels compared to traditional fuels, as well as the potential strain on agricultural resources required for the production of ethanol. The bill has the potential to spark discussions about agricultural policies and the broader implications of incentivizing biofuel use in Michigan.