Michigan House speaker proposes new $4.7 billion tax on certain services

Beth LeBlanc and Craig Mauger, The Detroit News on Feb 25, 2026

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LANSING, Mich. — House Speaker Matt Hall is proposing a targeted 6% sales tax on certain discretionary services that he hopes will generate about $4.7 billion and partially offset nearly $5 billion in property tax cuts that the Kalamazoo County Republican is floating.

Hall's service tax proposal, first reported by WLNS-TV, would target services such as private jets, limousines, country club memberships, newspapers, AI services and tourism services such as zoos or dune rides, Hall said Wednesday.

Other daily services would be exempt from the tax, he said, such as legal fees, health care, child care, dry cleaning, home and car repair and personal care.

"We’re not going to tax what I see as essential services," Hall said. "But we are going to put this tax on some of the more discretionary services.”

Hall's office was unable to immediately provide a full list of services that would be taxed and exempt; to some extent, that list appears still to be fluid. It's not clear which economic data the speaker's office is reviewing to drum up $4.7 billion in revenue from a service tax.

The speaker said he would seek the service tax through legislation that would end decades-old sales tax exemptions on the targeted services and not a ballot initiative.

Hall's proposal was met with deep skepticism Wednesday morning at the state Capitol.

State Sen. Sam Singh, a Democrat from East Lansing, said he usually takes the Republican speaker's plans with "a pound of salt," but looked forward to having a thoughtful conversation between the chambers.

"Oftentimes, you know, he's not looking at trying to get something done with the Legislature," Singh said of Hall. "He's just trying to move a political question forward to make a political point."

State Sen. Jeff Irwin, D-Ann Arbor, questioned some of the services Hall floated as being subject to the tax.

“I see why they want to tax journalism," Irwin said, "because the more people know about what’s happening in Lansing, the worse for them.”

A Treasury estimate for the 2022 and 2023 fiscal years found that about $16.9 billion in potential tax revenue was available if the state were to tax all services for consumers and businesses alike. About $5.4 billion of that total represented services purchased by actual consumers.

Hall argued Wednesday his tax proposal would target services as they are delivered to consumers and would attempt to avoid business-to-business services.

Last week, Hall outlined a nearly $5 billion property tax cut proposal that would eliminate the 6-mill State Education Tax, the 0.75% real estate transfer tax, the personal property tax and the so-called pop-up tax incurred when a home's taxable value jumps at the point of sale.

Hall's office estimated the elimination of the State Education Tax would cut about $2.9 billion, the real estate transfer tax about $400 million and the personal property tax about $1.6 billion, for a total of about $4.9 billion. The expected increase in pop-up tax savings is nearly impossible toSu predict as it's dependent on home sale frequency, cost and other factors leading up to the sale.

Hall has argued the personal property tax cut, which would be a boon for utilities, should be paired with at least $1 billion in utility rate cuts for consumers.

Hall expects the property tax cuts balanced against the service tax would result in a net loss of roughly $275 million in revenue, make schools whole that are otherwise reliant on the property tax and make local governments reliant on the property tax "close to whole."

School groups were quick to condemn Hall's property tax proposal last week and he's likely to face some significant pushback from the industries subject to his proposed service tax. Past efforts to pass a service tax under Democratic Gov. Jennifer Granholm were largely panned.

The speaker, noting Gov. Gretchen Whitmer and Senate Majority Leader Winnie Brinks are both term-limited and in their final months of their respective offices, called on both Democratic leaders to come to the table to debate the tax plan.

"I’ve seen the governor has been a little distracted lately and focused on other things," Hall told The Detroit News. "My hope is this will get Gov. Whitmer’s attention and it will draw her in.”

Earlier this month, Whitmer announced she would seek about $90 million in targeted property tax relief for the state's seniors. State Sen. Sarah Anthony, D-Lansing, has proposed a property tax plan that would remove barriers inherent in the Michigan Homestead Property Tax Credit.

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