Michigan Lessor/Lessee Fuel Tax Liability Reform Advances
LANSING, MI – On June 20, the Michigan House Committee on Transportation approved House Bill 6031, legislation requested by the Truck Renting & Leasing Association (TRALA) that would extend indefinitely the state’s moratorium on enforcement of the lessor/lessee fuel tax joint and several liability law. The outdated joint and several law exists as part of the Michigan Motor Carrier Fuel Tax Act and holds a lessor responsible for unpaid fuel tax owed by a lease customer, according to TRALA. HB 6031 was introduced by Rep. Kevin Green (R–Kent County) and is expected to be heard in the full of House of Representatives soon.
Upon Michigan’s entry into the International Fuel Tax Agreement (IFTA) in 1994, the joint and several liability law was no longer enforced since Michigan’s IFTA enabling legislation included language stating, “If the provisions set forth in that agreement [IFTA] are different from this act [Michigan Motor Carrier Fuel Tax Act], the provisions of the IFTA agreement shall control.”
The IFTA guidelines state that the lease agreement determines the fuel tax responsibilities of the lessor and lessee. Nevertheless, the initial law holding lessors jointly and severally liable was never repealed. Recently, the State Treasury Department resumed enforcement of the law on a Michigan-based TRALA member.
Enactment of HB 6031 would further TRALA’s legislative victory in 2004 that put a two-year moratorium on enforcement of the state’s fuel tax joint and several liability law.