LANSING, Mich. — Sen. Mark Huizenga on Thursday voted to clarify how a state tax exemption applies to producing aggregates like crushed stone and gravel products and industrial and recycled materials.
“We need to use part of our historic budget surplus to improve our roads and local infrastructure, and these bills would help reduce taxes on the equipment used to produce the critical building materials for these long-term investments,” said Huizenga, R-Walker. “While I will continue to work to pass similar reforms to provide needed relief to local small businesses by solving the problem of confusing taxes on the delivery and installation of goods, these measures will help West Michigan job providers struggling with increased costs.”
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.
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.