HB 4378 Summary

• Amends Michigan's sales tax law (1933 PA 167, MCL 205.54g) regarding food and beverage tax exemptions and prepared food definitions.

• Clarifies that bakery items (bread, rolls, buns, bagels, croissants, pastries, doughnuts, cakes, cookies, tortillas) sold without eating utensils are not subject to sales tax.

• Establishes a 75% threshold for determining tax treatment based on prepared food sales percentage: sellers exceeding 75% prepared food sales must provide or make available eating utensils for most items, while sellers at or below 75% must only give or hand utensils to purchasers.

• Defines "prepared food sales percentage" as the ratio of annual prepared food sales to total annual food and food ingredient sales, calculated annually within 90 days of the tax year start using prior year data.

• Effective date: 91 days after final adjournment of the 2023 Regular Session (Sine Die); approved by Governor October 3, 2023.