Michigan Notes

[kphoger]

Michigan gas taxes changing
https://www.mlive.com/news/2025/10/taxes-on-gas-are-changing-in-michigan-heres-what-to-know.html

Old system: 31-cents-per-gallon state fuel tax, plus an 18.4% federal fuel tax, and a 6% sales tax.
New system: 31-cents-per-gallon state fuel tax, plus an 18.4% federal fuel tax, plus 20 cents sales tax.

Gas needs to be $3.34 to be the same tax as the old system

Specifically, $3.34/gallon before taxes.

In other words, the price needs to be $4.45 on the pump.

Anything higher than $3.34 pre-tax will yield a lower total tax amount.  Anything lower than $3.34 pre-tax will yield a higher total tax amount.

$2.50 = Pre-tax per gallon
$0.91 = Total tax, old system
$3.41 = Price at the pump, old system
$0.96 = Total tax, new system
$3.46 = Price at the pump, new system

$3.34 = Pre-tax per gallon
$1.11 = Total tax, either way
$4.45 = Price at the pump, either way

$4.00 = Pre-tax per gallon
$1.27 = Total tax, old system
$5.27 = Price at the pump, old system
$1.23 = Total tax, new system
$5.23 = Price at the pump, new system

[JREwing78]

Michigan gas taxes changing
https://www.mlive.com/news/2025/10/taxes-on-gas-are-changing-in-michigan-heres-what-to-know.html

Old system: 31-cents-per-gallon state fuel tax, plus an 18.4% federal fuel tax, and a 6% sales tax.
New system: 31-cents-per-gallon state fuel tax, plus an 18.4% federal fuel tax, plus 20 cents sales tax.

Gas needs to be $3.34 to be the same tax as the old system

Ummm, not quite:
Old system: 31-cents-per-gallon state fuel tax, plus an 18.4% federal fuel tax, and a 6% sales tax.
New system: 51-cents-per-gallon state fuel tax, plus an 18.4% federal fuel tax

In other words, they raised the fuel tax 20 cents and dropped the sales tax. The sales tax never went to roads. So effectively roads are now getting 20 more cents per gallon.

As a result, Michigan is no longer pulling funds from the gas tax to the general fund. It's all going to road funding. Oh, and when gas is relatively cheaper, you're saving a couple more cents than otherwise. Will you ever notice? Doubt it. 

They could've taken this opportunity to index the gas tax to inflation, but why would Michigan do something smart like that? That would require the politicians to demonstrate foresight and intelligence.