HB 5318 — Sales tax: exemptions; certain exemptions; modify. Amends secs. 4o & 4q of 1933 PA 167 (MCL 205.54o & 205.54q).

SUBSTITUTE FOR HOUSE BILL NO.

5318 DecemberA 02,bill 2025,to Introducedamend 1933 PA 167, entitled "General sales tax act," by Reps.amending sections 4o and 4q (MCL 205.54o and 205.54q), section 4o as amended by 2018 PA 249 and section 4q as amended by 2018 PA 530.

Frisbie, Pavlov, Rigas, Roth, Snyder, Liberati, Tate and Aragona and referred to Committee on Finance.

A bill to amend 1933 PA 167, entitled "General sales tax act," by amending sections 4o and 4q (MCL 205.54o and 205.54q), section 4o as amended by 2018 PA 249 and section 4q as amended by 2018 PA 530.

(1) The Except as otherwise limited under this subsection and subject to subsection (2), the sale of the first $10,000.00 of tangible personal property in a calendar year for fund-raising purposes by a school, church, hospital, parent cooperative preschool, or nonprofit organization that has a tax- ERE H04811'25_HB5318_INTR_1 pvxinu 1 exempt status under section 4q(1)(a) or (b) and that has aggregate sales at retail in the calendar year of less than $25,000.00 are ERE H04811'25 (H-1) 4hdur2 1 for the purpose of raising funds for the charitable purpose of the organization is exempt from the tax under this act.

(4) A club, association, auxiliary, or other organization affiliated with a veterans' organization that is exempt from ERE H04811'25_HB5318_INTR_1 pvxinu 1 federal income tax under section 501(c)(19) of the internal revenue code of 1986, 26 USC 501, is not considered a separate person for ERE H04811'25 (H-1) 4hdur2 1 purposes of this the exemption under subsection (3).

(d) "School""Fund-raising event" means eacha elementary,meeting, middle,gathering, junior,activity, or highoccasion, schoolregardless siteof withinwhether conducted in person, virtually, or through hybrid means and whether conducted on a localsingle schoolday districtor thatover representsa period of time, at or through which a districtperson attendancesolicits, areareceives, ascollects, establishedencourages, bypromotes, or facilitates the boardmaking of contributions, donations, pledges, or other items of monetary or in-kind value for the localbenefit schoolof district.a person described in subsection (1) or (3).

(e)Fund-raising (c)event "Serviceincludes, member"but meansis anot memberlimited ofto, theall Armed Forces of the Unitedfollowing: States, a reserve branch of the Armed Forces of the United States, or the National Guard.

(f)(i) (d)A "Veteran"reception, meansdinner, anyor ofbanquet. the following:

ERE H04811'25_HB5318_INTR_1H04811'25 pvxinu(H-1) 4hdur2 1 (i)(ii) A person An individualauction, whoraffle, servedor onsale active duty in the Armed Forces of thegoods Unitedor Statesservices forto araise periodmoney. of more than 180 days and separated from the Armed Forces of the United States in a manner other than a dishonorable discharge.

(iii) An online campaign.

(iv) A ticketed event.

(v) Any other event for which attendance, participation, or recognition is conditioned on or associated with the making or solicitation of a contribution or through which contributions are solicited or received by purchase of a ticket, payment of an attendance fee, making a donation, or purchase of goods or services.

(e) "School" means each elementary, middle, junior, or high school site within a local school district that represents a district attendance area as established by the board of the local school district.

(f) (c) "Service member" means a member of the Armed Forces of the United States, a reserve branch of the Armed Forces of the United States, or the National Guard.

(g) (d) "Veteran" means any of the following:

(i) A person An individual who served on active duty in the Armed Forces of the United States for a period of more than 180 days and separated from the Armed Forces of the United States in a manner other than a dishonorable discharge.

(A) Was a member of a reserve branch of the Armed Forces of the United States at the time he or she when the individual was ordered to active duty pursuant to subtitle E of title 10 of the ERE H04811'25 (H-1) 4hdur2 1 United States Code, under 10 USC 10001 to 18506.

(c) An organization not operated for profit and exempt from ERE H04811'25_HB5318_INTR_1 pvxinu 1 federal income tax under section 501(c)(19) of the internal revenue code, 26 USC 501.

(b) Sales of tangible personal property or vehicles used for ERE H04811'25 (H-1) 4hdur2 1 purposes of raising funds or obtaining resources if the sales price exceeds the following:

(b) Present a signed statement, on a form approved by the department, stating that the property is to be used or consumed in connection with the operation of the organization, to carry out the ERE H04811'25_HB5318_INTR_1 pvxinu 1 purpose or purposes of the organization, or to raise funds or obtain resources necessary for the operation of the organization, that the organization qualifies as an exempt organization under this section, and that the sales price of any single item of tangible personal property or vehicle purchased for purposes of raising funds or obtaining resources does not exceed the applicable cap amount established in subsection (2)(b).

However, a copy of the federal exemption letter is not required if the organization is exempt from filing an application for exempt status with the internal revenue service.Internal ERE H04811'25 (H-1) 4hdur2 1 Revenue Service.

The exemption for any single item of tangible personal property or vehicle used to raise funds or obtain resources is ERE H04811'25_HB5318_INTR_1 pvxinu 1 limited to a sales price that does not exceed $5,000.00 for an organization exempt under subsection (1)(a) or (b) and $25,000.00 for an organization exempt under subsection (1)(c).$60,000.00 for a single item of tangible personal property and $75,000.00 for a vehicle, adjusted for inflation as provided in subsection (6).

If the cumulative annual percentage change in the Consumer Price Index is ERE H04811'25 (H-1) 4hdur2 negative, then the adjustment for that calendar year is zero.

FinalEnacting Pagesection ERE1. H04811'25_HB5318_INTR_1 pvxinu

This amendatory act takes effect 90 days after the date it is enacted into law.

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