Impact and How They Voted on May 5 Sales Tax Increase Ballot Measure

Who voted “yes” and who voted “no” for $2 billion tax increase

Approximately two billion dollars in additional taxes will be collected if voters approve a May 5 ballot proposal, based on figures projected by Michigan's legislative fiscal agencies. Here is the breakdown:

The May 5 ballot measure would increase the state sales tax from 6 percent to 7 percent. If approved by voters it would by itself collect an additional $1.427 billion in sales tax each year, and also automatically trigger an additional $523.9 million tax increase in the first year, and $663 million annually when all tax changes are fully realized (not counting inflation indexing provisions that could make the number higher in future years).

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If voters say “no” to the ballot measure these other tax hikes will not go into effect. They include:

  • A net gas and diesel tax hike of $463 million. The actual increase will depend on the price of fuel.
  • Vehicle registration tax changes that will raise $10.9 million in the first year, and $150 million when fully realized.
  • A $50 million increase in truck registration taxes.

This is on top of a $60 million Internet sales tax that goes into effect regardless of the May 5 vote, reportedly enacted as part of the deal to put the sales tax increase on the ballot. The package also increases by $260 million state spending on low-wage household income enhancement subsidies distributed as tax credits, which is contingent on a “yes” vote.

The House Fiscal Agency has published a detailed analysis of the entire package. All told it is projected to collect around an additional $2 billion each year, of which $1.2 billion will go to road funding.

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Here are the December 2014 votes that placed the sales tax increase on the ballot, and authorized other tax hikes, most of which are contingent on its passage:

2014 House Joint Resolution UU: Place sales tax increase to 7 percent on May 5 ballot

Passed 94 to 16 in the House on December 19, 2014.
Who Voted "Yes" and Who Voted "No"
Passed 26 to 12 in the Senate on December 19, 2014.
Who Voted "Yes" and Who Voted "No"

2014 House Bill 5477: Increase gas tax
To replace the current 19-cent per gallon gas tax to 41.7 cents, and the 15-cent diesel tax to 46.4 cents, and index these taxes to inflation. This would be partially offset by exempting fuel sales from the state sales tax (House Bill 4539). However, neither bill will go into law unless voters approve House Joint Resolution UU in a May 5, 2015 vote, which would increase the state sales tax from 6 percent to 7 percent. When combined with other tax hike bills in the package it represents a net tax increase of around $2 billion.

Passed 23 to 15 in the Senate on December 19, 2014.
Who Voted "Yes" and Who Voted "No"
Passed 93 to 17 in the House on December 19, 2014.
Who Voted "Yes" and Who Voted "No"

2013 House Bill 4539: Exempt fuel sales from sales tax
To exempt gasoline and diesel purchases from sales tax. This will not go into effect if voters do not approve the sales tax hike in a May 5, 2015 election.

Passed 88 to 22 in the House on December 19, 2014.
Who Voted "Yes" and Who Voted "No"
Passed 23 to 15 in the Senate on December 19, 2014.
Who Voted "Yes" and Who Voted "No"

2013 House Bill 4630: Increase vehicle registration taxes
To increase vehicle registration taxes on trucks, on cars more than three years old, and on electric vehicles. This will not go into effect if voters do not approve the sales tax hike in a May 5, 2015 election.

Passed 67 to 43 in the House on December 19, 2014.
Who Voted "Yes" and Who Voted "No"
Passed 23 to 15 in the Senate on December 19, 2014.
Who Voted "Yes" and Who Voted "No"

2013 Senate Bill 659: Impose “Amazon tax” on internet purchases
To impose the state use tax on catalog or internet purchases made from sellers outside the state with affiliates inside the state, in the manner pioneered by internet retailer Amazon.com. This goes into effect regardless of the May 5 ballot measure.

Passed 21 to 16 in the Senate on December 11, 2014.
Who Voted "Yes" and Who Voted "No"
Passed 83 to 27 in the House on December 19, 2014.
Who Voted "Yes" and Who Voted "No"

2014 Senate Bill 847: Increase Earned Income Tax Credit
To increase the state earned income tax credit from an amount equal to 6 percent of the federal EITC to 20 percent, which will distribute around $260 million annually to low income wage households in the form of a “refundable” tax credit, where a check is sent to households who owe no income tax. This will not go into effect if voters do not approve the sales tax hike in a May 5, 2015 election.

Passed 78 to 32 in the House on December 19, 2014.
Who Voted "Yes" and Who Voted "No"
Passed 23 to 15 in the Senate on December 19, 2014.
Who Voted "Yes" and Who Voted "No"

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