LANSING, Mich. (Michigan News Source) – The Michigan House passed legislation expanding the definition of food sold in an unheated state by weight or volume and food sold with eating utensils in order to expand taxable food products in Michigan. 

The primary House Bills, HB 4377 and 4378 passed with narrow margins, with 56 Representatives voting yes and 53 voting in opposition. 

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Some of those not supporting the bills offered their objections including Representative Mark Tisdel (R-Rochester Hills), who opposed taxing more food and drink sales in the state. 

 “Lansing politicians are serving up a distasteful tax hike cooked up by tax bureaucrats,” said Tisdel, who is also a member of the the House Tax Policy Committee. “Taxing more foods and beverages — in an extremely convoluted way — will eat up more of Michiganders’ hard-earned income. At the same time, small businesses in our communities will have to navigate the confusing tax policy to figure out which food and drink items are taxed. I’ll keep fighting for Michiganders and small businesses against new, unfair taxes.”

Under Michigan law, food and nonalcoholic drinks are exempt from sales and use taxes, with the exception for prepared products meant for immediate consumption. 

A report on the financial impact of the bills has determined that the bills would not have a significant fiscal impact. 

“As written, the bills would not be expected to have a significant fiscal impact, although they are still being examined in an attempt to determine a more precise estimate,” the report said, “The fiscal impact will be updated as more information becomes available.”

Critics of the bills have said the new requirements “would set many arbitrary distinctions between taxable and nontaxable goods: how utensils or napkins are made available to customers; whether a bottled soft drink is sweetened or contains milk or juice; how much of a business’s total food sales are prepared food; and other criteria.” 

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While the bills had the support of the Department of Treasury and Streamlined Sales Tax Governing Board, they were opposed by the Michigan Chamber of Commerce, Detroit Chamber of Commerce, and National Association of Theatre Owners of Michigan. 

Both HB 4377 and 4378 will now proceed to the Senate for consideration.