Michigan Legislators Working Towards Gas Tax Relief

Gas taxes have been similarly paused in other states

As gasoline prices hit record highs nationwide – and in Michigan – state leaders are pushing for gasoline tax relief.

Just ahead of Memorial Day Weekend, the state’s Senate Transportation and Infrastructure Committee passed a bill that would pause Michigan’s 27-cent-per-gallon fuel tax over the summer months, and suspend the state’s 6% general sales tax on gasoline purchases. The legislation, which would provide much needed relief for Michigan families, now heads to Michigan’s House for approval.

Around the country, legislators are grappling with the skyrocketing cost of gas and groceries as taxpayers increasingly demand relief from ongoing inflation. Meanwhile, domestic production has been stymied as well.

In Michigan, the average regular gas price is $4.25 per gallon as of May 1, on par with the national average, according to the American Automobile Association. That represents a 26-percent increase from the $3.37 per gallon from last month and a 53-percent spike from last year’s rate of $2.78, AAA data shows.

An analysis from JPMorgan Chase projects that $6 per gallon could be the U.S. average by August. In that case, the savings for Michigan drivers would be just over 61 cents per gallon.

The Senate Fiscal Agency notes the pause would save Michigan taxpayers between $763 million and $804 million. That is much-needed relief to families and workers who are struggling to make ends meet and would also help alleviate higher transportation costs that businesses are now facing.

Michigan is in a position to consider a gas tax pause because of solid fiscal management by the state legislature. State economists have forecasted that Michigan will bring in an extra $5 billion in tax revenue over the next two years.

The legislation now moves to the House floor.