Michigan Treasury Releases Treasury Update Announcing 2026 Fuel Tax Changes, Exemptions

The Michigan Department of Treasury released an update announcing significant changes to fuel taxes and exemptions, effective Jan. 1, 2026. The changes include: 1) phasing out the prepaid sales tax on motor fuel; 2) exempting “eligible fuel” from sales and use taxes; 3) increasing motor fuel tax rates to capture the lost sales tax revenue; 4) imposing a one-time floor stock tax on certain fuel inventories; and 5) eliminating the use tax on motor fuel for IFTA motor carriers. [Mich. Dep’t of Treasury, Treasury Update – December 2025, 12/01/25]

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