Hello MICPA members,
It has been an active week in Lansing, and we want to share an update on two recent developments at the state Capitol: the Governor’s final State of the State address and the tax reform proposal released by House Speaker Matt Hall.
State of the State
Governor Whitmer’s final address outlined several policy priorities for her last year in office, including literacy initiatives, housing-related proposals, and measures related to medical debt and Medicaid. These items were discussed with general acknowledgment from across the political spectrum and legislative engagement will continue as proposals are refined.
House Republican Tax Reform Proposal
Last Thursday, House Speaker Matt Hall released preliminary details of a tax reform proposal that would significantly restructure Michigan’s property tax system. According to the CPA Practice Advisor, the plan would eliminate four different property-related taxes including the State Education Tax, personal property tax, real estate transfer tax, and the so-called “pop-up” tax- for an estimated total reduction of nearly $5 billion1.
Speaker Hall’s office has indicated an intention to maintain funding levels for local governments and school districts, although the mechanism for doing so has not yet been detailed.
To address potential revenue shortfalls, the proposal includes a 6 percent sales tax on a set of currently untaxed services, with early reporting from WLNS.com suggesting this could apply to select “luxury” or discretionary services2. Discussions around which services would be included or excluded are ongoing.
What We’re Monitoring
At this stage, specific bill language has not been introduced, and questions remain as details evolve, including:
- How “luxury” services would be defined and applied for tax purposes.
- The potential for overlapping or double taxation in certain sectors.
- Broader implications of expanding sales tax to selected services.
The MICPA is seeking clarity on the new proposals and engaging with legislative offices to better understand their scope and potential impacts. We are working to ensure that both MICPA and our members have opportunities to participate in discussions as proposals are formalized.
As the legislative process unfolds and additional details become available, we will continue to review developments and share updates with you. If you have questions, please reach out to our Advocacy team at legislation@micpa.org.
Thank you for your engagement and thoughtful questions.
All the best,
Bob
- LaBlanc, Beth. “Michigan House Speaker Suggests Nearly $5B in Property Tax Cuts.” CPA Practice Advisor. 25 Feb. 2026.
- LaPlante, Brad. “Exclusive: GOP Speaker Matt Hall Proposes 6% Tax on Luxury Services to Fund Major Property Tax Cuts.” WLNS.COM. 24 Feb. 2026.