Michigan House Republicans
House approves Rep. Damoose plan to exempt vehicle discounts from sales, use taxes
RELEASE|November 3, 2021
Contact: John Damoose

The Michigan House of Representatives today approved state Rep. John Damoose’s bipartisan plan to remove sales and use taxes from rebates offered by vehicle manufacturers.

Damoose, R-Harbor Springs, and state Rep. Joe Tate, D-Detroit, introduced House Bills 4939 and 4940 to ensure drivers are not forced to pay taxes on a vehicle discount.

“When a vehicle is sold at a discount, state taxes should be calculated based on the lower price,” Damoose said. “Our bipartisan plan will make the tax code more fair for Michigan drivers by exempting vehicle manufacturer rebates from sales and use taxes.”

Automobile manufacturers often offer rebates on their vehicles to boost sales. Under current law, a buyer must pay sales or use tax on the full price of the vehicle without deducting the amount of the manufacturer’s rebate. Instead, HBs 4939-40 would exempt sales and use taxes on vehicle manufacturer rebates. The bills would not reduce revenue to the School Aid Fund.

HBs 4939-40 now advance to the Senate for consideration.

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