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Local Sales Tax to Fix Roads?

Author: Charles Owens Date: December 03, 2013

Recent discussions on how to raise more money for roads have included proposals to allow local governments to levy their own sales tax.

Michigan currently has no city, local, or county sales tax. The state sales tax rate is 6 percent and can only be raised by a state-wide vote of the people. Although local sales taxes are not expressly prohibited by the Michigan Constitution, the Michigan Attorney Generalhas interpreted the Constitution as effectively prohibiting them. Some are suggesting that Michigan should allow local governments to levy a sales tax within their jurisdiction for road funding.

One suggestion would allow locals to levy a sales tax of .25 percent for roads in exchange for eliminating local road millages, but constitutional concerns have been raised that would need to be sorted out before any serious proposal could be pursued.

 

NFIB members do not support raising the gas tax or registration fees to fund roads as others have proposed.

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