Thursday, June 11, 2026
The Honorable Mike Hoadley
Michigan House Committee on Economic Competitiveness
124 North Capitol Avenue
Lansing, MI 48933
Dear Chairman Hoadley and Members of the Michigan House Committee on Economic Competitiveness,
Thank you for letting National Taxpayers Union share our thoughts on the Draft 4 substitute amendment for HB 5139. NTU is the country’s oldest taxpayer advocacy group, and we work to make sure taxpayers’ concerns are heard in state capitols nationwide. We advocate for lower taxes, better tax administration, and policies that respect both taxpayers’ money and time.
HB 5139 brings up an important question about tax administration. When a lodging transaction is booked through an online platform, who should calculate, collect, and send in the tax that’s already owed? The answer is the platform. That’s because the goal here ought to be to make tax administration simple, accurate, and transparent, while handing the responsibility over to those best able to handle the job efficiently.
Instead of having thousands of individual property owners trying to manage the process on their own, the platform is in the cleanest position to handle the tax. When a lodging transaction is handled by a marketplace, the platform already has all the important details. It has the location and proper tax jurisdiction, the booking price, the duration of the stay, how much the guest actually paid, whether there was a cancellation, and ultimately what’s on the customer’s receipt. That makes it the most logical party to calculate, collect and remit the tax.
Compliance costs of tax administration are real. According to a National Taxpayers Union Foundation study, taxpayers spent nearly 7 billion hours and almost $500 billion to complete their 2025 taxes. Even when rates stay the same, the system can become more expensive and frustrating for small business owners. These local property owners lose time and money figuring out registration, filing, local tax rules, and potential penalties.
Most of the short-term rental hosts in Michigan are not big businesses with large tax compliance teams of accountants and lawyers. Some are families renting out a lake house for a few weekends. Others are retirees using rental income to help with their fixed income amid rising costs. Some are just homeowners welcoming travelers during college football games, weddings, festivals, summer trips, fall color season, or other local events across the state. In other words, they’re just regular people trying to follow the rules from their kitchen table.
HB 5139 offers a common sense solution. If an app manages both the booking and payment for a rental, it should also take care of that transaction’s tax administration.
This approach has several benefits for taxpayers:
- Reducing paperwork and confusion for small property owners
- Improving accuracy because platforms have the information needed to apply the tax correctly
- Showing taxes more clearly for tourists, travelers, and customers at checkout
- More efficient administration for the Treasury Department by working with more sophisticated platforms rather than thousands of individual property owners
- Lowering risk of honest taxpayers being penalized for misunderstanding a complicated tax system
When tax compliance is strenuous, some small hosts may decide renting is not worth their time, which would mean fewer lodging options for tourists, especially during busy seasons. This is critical, as per the most recent study by Travel Michigan, the state welcomed more than 130 million visitors in 2024, generating nearly $31 billion in visitor spending and $3.6 billion in state and local tax revenue. Simpler administration helps keep these operators engaged while guaranteeing accurate collection.
We at NTU would encourage the Committee to keep this bill focused on its tax-administration purpose. It should not create a new tax, raise tax rates, or expand local tax authority. Supporting simpler collections is not an excuse for raising taxes.
The Draft 4 substitute keeps HB 5139 in the right direction. HB 5139 is a practical reform that can make business easier for small property owners, clearer for tourists, more efficient for the Treasury Department—and it can be done without raising taxes. For these reasons and more, NTU supports the straightforward, commonsense approach in HB 5139 and urges lawmakers to keep the bill focused on simplicity, transparency, and taxpayer protection.
Thank you for considering our comments. If you have any additional questions, please feel free to connect with our team of researchers and experts.
Sincerely,
Mattias Gugel
Director of State External Affairs
National Taxpayers Union
mgugel@ntu.org