Senate approves Bellino aggregate processing tax cut bill

Senate approves Bellino aggregate processing tax cut bill

LANSING, Mich. — The Michigan Senate on Thursday approved Sen. Joseph Bellino’s legislation to clarify how a state tax exemption applies to producing aggregates like crushed stone and gravel products and industrial and recycled materials.

“As we continue our efforts to fix our local roads, these bills would resolve a dispute between the state and suppliers on equipment used to make the materials needed to make these critical infrastructure improvements,” said Bellino, R-Monroe. “This plan would ensure school funding is not affected and represents a positive step toward helping Michigan businesses dealing with higher costs due to runaway inflation.”

Equipment used in processing aggregates includes loaders, feeders, crushers, screens, conveyors, dust control equipment and generators. Recent audits from the Michigan Department of Treasury have disputed the use tax industrial processing exemption on this equipment.

Bellino’s bill, Senate Bill 97, would amend the state’s Use Tax Act to clarify that the industrial processing exemption for machinery and equipment used in aggregate production is applicable as long as use tax is paid on the product.

House Bill 4054 would amend the state’s General Sales Tax Act by adding the production, manufacturing, or recycling of aggregate to the industrial processing exemption if the aggregate is subject to the use tax.

The Senate added language to both measures to hold the state’s School Aid Fund harmless.

SB 97 now heads to the House of Representatives for consideration. HB 4054 returns to the House for approval of the Senate’s changes.


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