2013 Senate Bill 90 / Public Act 234

Vehicle trade-in “use tax on the difference” only

Introduced in the Senate

Jan. 29, 2013

Introduced by Sen. David Robertson (R-26)

To exempt from use tax the value of a trade-in when buying a motor vehicle, titled watercraft or recreational vehicle. The buyer would only pay sales tax on the difference between the value of the trade-in and the purchase price of the replacement car. The tax break would be phased in steps through 2019.

Referred to the Committee on Finance

Feb. 5, 2013

Reported without amendment

With the recommendation that the substitute (S-1) be adopted and that the bill then pass.

Substitute offered

To adopt a version that phases in the tax break over a longer period.

The substitute passed by voice vote

Feb. 6, 2013

Amendment offered by Sen. Randy Richardville (R-17)

To move back the bill's effective date to Oct. 1, 2013.

The amendment passed by voice vote

Amendment offered by Sen. Jack Brandenburg (R-11)

To move forward the effective date of the tax break for watercraft purchases.

The amendment passed by voice vote

Passed in the Senate 36 to 0 (details)

To exempt from use tax the value of a trade-in when buying a motor vehicle, titled watercraft or recreational vehicle. The buyer would only pay sales tax on the difference between the value of the trade-in and the purchase price of the replacement. The tax break would be phased in gradually through 2021.

Received in the House

Feb. 6, 2013

Referred to the Committee on Tax Policy

May 29, 2013

Reported without amendment

Without amendment and with the recommendation that the bill pass.

Nov. 13, 2013

Referred to the Committee on Tax Policy

Dec. 4, 2013

Reported without amendment

With the recommendation that the substitute (H-2) be adopted and that the bill then pass.

Dec. 10, 2013

Substitute offered

The substitute passed by voice vote

Amendment offered by Rep. Jeff Farrington (R-30)

To also grant the tax break if the vehicle is bought from a used car dealer, rather than only if it is bought from a new car dealer.

The amendment passed by voice vote

Dec. 11, 2013

Passed in the House 102 to 7 (details)

To exempt from use tax the value of a trade-in when buying a motor vehicle, titled watercraft or recreational vehicle, but phase this tax break in over 24 years. The phase-in would be suspended if the federal health care law's ("Obamacare") Medicaid expansion (authorized by House Bill 4714) is rescinded, but legal experts are divided over whether this would be allowed. See also Senate Bill 89.

Received in the Senate

Dec. 11, 2013

Passed in the Senate 38 to 0 (details)

To concur with the House-passed version of the bill, which extended the tax break to vehicles purchased from a used care dealer.

Signed by Gov. Rick Snyder

Dec. 21, 2013