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Michigan Incentives and Laws

Listed below are the summaries of all current Michigan incentives, laws, regulations, funding opportunities, and other initiatives related to alternative fuels and vehicles, advanced technologies, or air quality. You can go directly to summaries of:

• State Incentives (8)
• Utility/Private Incentives (4)
• Laws and Regulations (4)

State Incentives

Advanced Vehicle Battery Manufacturer Tax Credits

Manufacturers of traction battery packs for use in vehicles may qualify for a tax credit from the Michigan Economic Development Corporation for tax years beginning on or after January 1, 2010 and ending before January 1, 2015. The amount of the credit is based on kilowatt hours (kWh) of battery capacity. Qualified batteries must have a traction battery capacity of at least 4 kWh, be equipped with an electrical plug for charging purposes, and be installed in a new, qualified plug-in electric drive motor vehicle that qualifies for the federal tax credit specified in 26 U.S. Code 30D.

Beginning January 1, 2012, a manufacturer may claim a tax credit of up to 75% of the qualified expenses for vehicle engineering to support battery integration, prototyping, and launching, so long as the expenses are incurred between January 1, 2009, and January 1, 2014. The same credit is available to a manufacturer that increases its engineering activities for advanced automotive battery technologies.

Taxpayers also may claim a tax credit equal to 50% of the capital investment expenses for the construction of an integrative cell manufacturing facility that includes anode and cathode manufacturing and cell assembly if the project creates at least 300 new jobs in the state. Taxpayers that have received federal loan guarantees may claim a credit equal to 25% of the capital investment expenses for the construction of a facility that will produce large scale batteries and manufacture integrated power management, smart control, and storage systems if the project creates at least 500 new jobs in the state.

(Reference Michigan Compiled Laws 208.1434)

Hybrid Electric Vehicle Research and Development Tax Credit

A taxpayer engaged in research and development of a qualified hybrid system that has the primary purpose of propelling a motor vehicle may claim a tax credit under the Michigan Business Tax through December 31, 2015. This tax credit is equal to 3.9% of all wages, salaries, fees, bonuses, commissions, or other payments made in the taxable year on behalf of or for the benefit of employees for services performed in a qualified facility. The maximum amount of credit allowed for any one taxpayer is $2 million per tax year. (Reference (Reference Michigan Compiled Laws 208.1101-208.1601)

Alternative Fuel and Vehicle Research, Development, and Manufacturing Tax Credits

Qualified taxpayers may claim a non-refundable credit for tax liability attributable to research, development, or manufacturing of qualified alternative fuel vehicles (AFVs) and renewable fuel. For the purpose of this incentive, AFVs include fuel cell, electric, hybrid electric, natural gas, E85, liquefied petroleum gas or propane, and hydrogen vehicles. Renewable fuels include biodiesel blends of at least 20%. The Michigan NextEnergy Authority must certify eligible taxpayers. Additionally, businesses located within the designated Alternative Energy Zone that are engaged in qualified activities may claim a credit for the qualified payroll amount. (Reference Michigan Compiled Laws 207.821-207.827 and 208.1429)

Reduced Biofuels Tax

A tax of $0.12 per gallon is imposed on gasoline containing at least 70% ethanol (E70) and diesel fuel containing at least 5% biodiesel (B5). This is a $0.07 discount compared to the conventional gasoline tax of $0.19 per gallon and a $0.03 discount compared to the conventional diesel tax of $0.15 per gallon. Ethanol is defined as denatured ethanol fuel that is suitable for use in a spark-ignition engine when mixed with gasoline and must meet ASTM D5798 specification. Biodiesel is defined as a fuel composed of mono-alkyl esters of long chain fatty acids derived from vegetable oils or animal fats and meets ASTM D6571 specification, as approved by the Michigan Department of Agriculture. Funding for this tax reduction is subject to appropriation. (Reference Michigan Compiled Laws 207.1008)

Ethanol Blend Infrastructure Grant Program

The Clean Energy Coalition offers grants of up to $10,000 per facility for the cost of purchasing and installing fueling infrastructure necessary to dispense ethanol blends between 15% (E15) and 85% (E85). New infrastructure as well as the conversion of existing infrastructure is eligible. Grants are available for retail and fleet fueling locations that are open to the public, and the infrastructure must be in place and available for use by December 31, 2012. Additional terms and conditions apply. For more information, see the Clean Energy Coalition website.

Alternative Fuel Development Property Tax Exemption

A tax exemption may apply to industrial property that is used for, among other purposes, high-technology activities or the creation or synthesis of biodiesel fuel. High-technology activities include those related to advanced vehicle technologies such as electric, hybrid electric, or alternative fuel vehicles and their components. To qualify for the tax exemption, an industrial facility must obtain an exemption certificate for the property from the Michigan State Tax Commission. (Reference Michigan Compiled Laws 207.552 and 207.803)

Alternative Fuel Vehicle (AFV) Tax Exemption

Qualified AFVs are exempt from personal property taxes. The exemption only applies to personal property that is new to Michigan. To be eligible, the vehicle must not have been previously taxed or exempted from taxation under another law. Eligible vehicles must also:

• Be produced by an original equipment manufacturer;
• Meet the Federal Motor Vehicle Safety Standards;
• Meet local emissions standards; and
• Be propelled by natural gas, fuel blends containing at least 85% ethanol), liquefied petroleum gas (LPG, or propane), or fuel blends containing at least 85% methanol), or be a fuel cell vehicle, electric vehicle, or hybrid electric vehicle.

The Michigan NextEnergy Authority must certify the vehicle in order for it to be eligible. The exemption expires on December 31, 2012.

(Michigan Compiled Laws 207.82 and 211.9(i))

Alternative Fuel Vehicle (AFV) Emissions Inspection Exemption

Dedicated AFVs powered by compressed natural gas, propane, electricity, or any other source as defined by the Michigan Department of Transportation are exempt from emissions inspection requirements. (Reference Michigan Compiled Laws 324.6311 and 324.6512)

Utility/Private Incentives

Electric Vehicle Supply Equipment (EVSE) Incentive - Coulomb Technologies

Coulomb Technologies' ChargePoint America program offers EVSE at no cost to individuals or entities in southern Michigan. To be eligible for free home charging stations, individuals living within the specified areas must purchase a qualified plug-in electric vehicle. Application information is available on the ChargePoint America website. In most cases, installation will be paid for by the EVSE owner; some cities, states, and utilities, however, will provide funding towards installation costs. All participants in the ChargePoint America program must agree to anonymous data collection after installation. Additional restrictions may apply.

Plug-In Electric Vehicle Charging Rate Reduction and Rebate - Consumers Energy

Consumers Energy offers three different rate structures for plug-in electric vehicle (PEV) owners, including two time-of-use rates and one monthly flat rate. For more information, see the Consumers Energy PEV Rate Options website. Consumers Energy also offers qualified customers a reimbursement of up to $2,500 to cover the purchase, installation, and wiring for qualified Level 2 electric vehicle supply equipment (EVSE). For more information, see the Consumers Energy PEVs Incentive Program website.

Plug-In Electric Vehicle Charging Rate Reduction - DTE Energy

DTE Energy offers a reduced electricity rate to qualified residential customers for charging all-electric and plug-in hybrid electric vehicles during off-peak hours. A flat rate option is also available. For rate information, see the DTE Energy Plug-In Electric Vehicle Rates website.

Electric Vehicle Supply Equipment (EVSE) Rebate - DTE Energy

DTE Energy will provide a $2,500 rebate for the purchase and installation of separately metered EVSE to the first 2,500 qualified customers who purchase all-electric or plug-in hybrid electric vehicles and enroll in the DTE plug-in electric vehicle rate. For additional information, see the Plug-In Electric Vehicle Program website.

Laws and Regulations

Development of Idle Reduction and Fuel-Efficient Driving Programs

The Michigan Department of Technology, Management, and Budget (DTMB) and the Department of Transportation must develop a Truck Idling Program for the state's fleet of motor vehicles, buses, and heavy-duty equipment. Additionally, the Department of Natural Resources and the Environment and the DTMB must develop an Eco-Driver Program for all employees using state vehicles. This program will provide education and training materials designed to maximize vehicle fuel economy by educating drivers on how driving patterns, vehicle technologies, and vehicle maintenance impact fuel economy. The Eco-Driver Program will serve as a model for the future development of an Eco-Driver Program targeted towards the general public. (Reference Executive Directive 2009-4)

Biofuels Blender Requirements

Blenders of ethanol and gasoline and biodiesel and diesel fuels outside of the bulk transfer terminal system must obtain a blender's license and are subject to blender reporting requirements. A licensed supplier who blends ethanol and gasoline or biodiesel and diesel fuels must also obtain a blender's license. (Reference Michigan Compiled Laws 207.1008)

Biodiesel Retail and Storage Requirements

All biodiesel and biodiesel blends sold in Michigan must meet state fuel quality requirements. A refiner, distributor, or retailer cannot transfer or dispense biodiesel or biodiesel blends unless the fuel is visibly free of undissolved water, sediments, and other suspended matter. Additionally, a biodiesel retailer may not sell biodiesel or biodiesel blends drawn from a storage tank that has more than two inches of water or water-alcohol at the bottom. Any retailer of biodiesel or biodiesel blends must obtain a license from the Michigan Department of Agriculture for each operating retail location. (Reference Michigan Compiled Laws 290.642-290.647)

Hydrogen Production and Retail Requirements

All hydrogen fuel produced and sold in Michigan must meet state fuel quality requirements. Any retailer offering hydrogen fuel for sale in the state must register with, and obtain approval from, the Michigan Department of Agriculture (MDA). A hydrogen retailer must also obtain a license from the MDA for each operating retail outlet. (Reference Michigan Compiled Laws 290.642-290.647)