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2013 Senate Bill 90: Vehicle trade-in “use tax on the difference” only

Public Act 234 of 2013

  1. Introduced by Sen. David Robertson (R) on January 29, 2013, 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 Senate Finance Committee on January 29, 2013.
      • Reported in the Senate on February 5, 2013, with the recommendation that the substitute (S-1) be adopted and that the bill then pass.
    • Substitute offered in the Senate on February 5, 2013, to adopt a version that phases in the tax break over a longer period. The substitute passed by voice vote in the Senate on February 5, 2013.
    • Amendment offered by Sen. Randy Richardville (R) on February 6, 2013, to move back the bill's effective date to Oct. 1, 2013. The amendment passed by voice vote in the Senate on February 6, 2013.
    • Amendment offered by Sen. Jack Brandenburg (R) on February 6, 2013, to move forward the effective date of the tax break for watercraft purchases. The amendment passed by voice vote in the Senate on February 6, 2013.
  2. Passed 36 to 0 in the Senate on February 6, 2013, 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.
    Who Voted "Yes" and Who Voted "No"

  3. Received in the House on February 6, 2013.
    • Referred to the House Tax Policy Committee on February 6, 2013.
      • Reported in the House on May 29, 2013, without amendment and with the recommendation that the bill pass.
    • Referred to the House Tax Policy Committee on November 13, 2013.
      • Reported in the House on December 4, 2013, with the recommendation that the substitute (H-2) be adopted and that the bill then pass.
    • Substitute offered in the House on December 10, 2013. The substitute passed by voice vote in the House on December 10, 2013.
    • Amendment offered by Rep. Jeff Farrington (R) on December 10, 2013, 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 in the House on December 10, 2013.
  4. Passed 102 to 7 in the House on December 11, 2013, 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.
    Who Voted "Yes" and Who Voted "No"

  5. Received in the Senate on December 11, 2013.
  6. Passed 38 to 0 in the Senate on December 11, 2013, to concur with the House-passed version of the bill, which extended the tax break to vehicles purchased from a used care dealer.
    Who Voted "Yes" and Who Voted "No"

  7. Signed by Gov. Rick Snyder on December 21, 2013.

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