This bill (and the equivalent Senate Bill 318) grant the long-needed exemption from sales tax for the amount of a new-car purchase paid for with a trade-in. This means that Michigan new-car buyers won't have to pay sales tax twice on the value of their used car: once when they bought it, and again when they trade it for a new car.
But unlike House Bill 4230 (Rep. Pearce), this bill only applies to the value of cars traded in for NEW cars. Michigan drivers trading one used car for another slightly-less-used car won't get the sales tax exemption. This bill only benefits car buyers wealthy enough to afford a brand-new car. Your $2,000 beater would be worth $120 more as a trade-in for a new $20,000 car, but not if you can only afford to trade up to a $6,000 used car.
This bill is just another sign that the Democratic Party is no friend of Michigan's working poor. And they don't care much for independent small businesses either, like used-car lots.