Michigan House Republicans
House approves Rep. Outman’s plan to improve Michigan’s sales and use tax codes
RELEASE|March 16, 2023
Contact: Pat Outman

            The Michigan House has approved State Rep. Pat Outman’s plan to make Michigan’s tax codes clearer and fairer for Michigan businesses.

            Many Michigan retailers experience confusion with the state’s inconsistent and unclear sales and use tax laws. Oftentimes, when the Department of Treasury audits these retailers, it concludes that retailers must pay sales and use taxes that were not collected on delivery and installation. In some cases, this has forced retailers to go to court to appeal audit findings because they believe they followed proper procedures to ensure their delivery and installation services would not be subject to sales and use tax.

             Outman said sales and use tax should only be applied to the purchase of the tangible good and not the services related to that purchase.

             “The confusing nature of our retail tax codes causes a waste of time and money for businesses forced to navigate the murky waters of the law,” said Outman (R-Six Lakes). “Delivery and installation are services – not products. They shouldn’t be subject to sales and use tax and they shouldn’t be the basis for the treasury department’s witch hunt on small businesses.

             “Our retailers provide countless jobs across the state and stimulate our economy – the state should be creating a better environment for small businesses to succeed in Michigan economy. This plan gained bipartisan support because it’s a commonsense solution to a problem we all agree needs to be fixed.”

             House Bill 4039 is part of a larger package of bipartisan-supported tax code reforms introduced by Republicans earlier this year. The plan was approved with overwhelming support and is now under consideration by the state Senate.


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