New Michigan laws provide reciprocity for certain loads

A Michigan bill package signed into law provides reciprocity for timber haulers in the Upper Peninsula.

Gov. Gretchen Whitmer signed into law three pieces of legislation to make the change.

The first bill, HB4978, exempts timber haulers who must cross the state’s borders from the International Fuel Tax Agreement.

The second bill, HB4977, allows the Michigan Department of Treasury to set fuel tax reciprocity agreements with other states. Specifically, the agency can permit the transport of raw forest products within 30 miles of the border.

Affected loads include logs, posts, poles, wood chips, sawdust, and Christmas trees not altered by a manufacturing process off the land.

A ‘win-win’

Rep. Gregory Markkanen, R-Hancock, told legislators while the state of Wisconsin is the focus, the agreement applies to other states.

He adds that Wisconsin, Iowa and Minnesota already have fuel tax reciprocity agreements for timber loads.

“I have spoken with many business owners and industry leaders who laid out the inconveniences caused by how things were done and I set out to change it,” Markkanen said in a news release.

“This will assist our forest and trucking industries – crucial parts of the U.P. economy – by removing additional requirements when only hauling short distances over state lines.”

Another bill, HB4976, exempts affected interstate carriers from the collection of streamlined sales and use tax under fuel tax reciprocity agreements.

A fiscal impact statement attached to the legislation shows that as of spring 2018 there were 3,335 trucks with Michigan log-truck registrations. Most of the affected trucks do not travel interstate or engage in cross-border commerce.

Markkanen says the agreements reduce paperwork for both log haulers and state employees. Additionally, the change is estimated to be revenue neutral on the state budget and transportation funding because fuel tax will still apply to fuel purchased in Michigan.

“It’s a win-win for our area and Michigan.”

The new laws took effect immediately. LL