Michigan Treasury Updates Fuel Tax, Sales Tax Exemption, MFTA Rate Adjustments

The Michigan Department of Treasury issued a notice regarding fuel tax changes from Public Acts 17-20 of 2025 that took effect on Jan. 1. Under these acts, the prepaid sales tax on motor fuel will cease, and the sale, use, storage, or consumption of “eligible fuel” will be exempt from sales and use tax beginning Jan. 1; the Motor Fuel Tax Act (MFTA) tax rate will be adjusted for inflation to $0.524 per gallon effective Jan. 1; and a one-time floor stock/inventory tax will be imposed on gasoline and undyed diesel fuel held in storage as of Dec. 31, 2025, ...