Michigan Governor Floats ‘Sales Tax Holiday’ for School Supplies, Property Tax Refund for Seniors

Why It Matters

The initiatives directly reduce household expenses for families and seniors, potentially boosting consumer spending and alleviating poverty pressures. They also signal the governor’s strategy to offset a looming budget gap without raising taxes.

Key Takeaways

• Sales‑tax holiday eliminates 6% tax on school supplies
• Seniors receive roughly 10% property‑tax refund, $345 average
• Retirement income tax roll‑back returns $1,000 to 500k seniors
• Working Families Tax Credit matches federal EITC at 30%
• Free pre‑K and meals persist, aiming for permanent law

Pulse Analysis

Michigan’s 2027 fiscal outlook is clouded by a projected $1 billion shortfall, prompting Governor Whitmer to lean on targeted tax relief rather than new revenue streams. The “Saving Michiganders Money” plan builds on recent rollbacks of retirement income taxes and the elimination of taxes on tips and Social Security, positioning the administration as fiscally responsive amid national inflation and local cost‑of‑living pressures. By coupling these broader tax cuts with a focused sales‑tax holiday, Whitmer aims to stimulate consumer confidence during the back‑to‑school season while preserving the state’s credit rating.

The sales‑tax holiday removes the 6% levy on clothing, classroom supplies, and computers, delivering immediate savings to families already grappling with debt‑laden school budgets. Simultaneously, the senior property‑tax refund, estimated at $345 per household, offers a modest but tangible cushion for 355,000 older residents. When layered with the full retirement‑tax rollback—returning roughly $1,000 to half‑a‑million seniors—the package creates a multi‑pronged relief effort that could translate into higher discretionary spending and reduced senior poverty rates.

Politically, the proposals serve as a defensive bulwark for Whitmer ahead of upcoming elections, showcasing tangible benefits without expanding the tax base. However, the cumulative cost of these cuts may pressure other program areas unless offset by efficiency gains or federal aid. Observers will watch how Michigan balances short‑term relief with long‑term fiscal health, a challenge echoed in neighboring states that have experimented with similar tax holidays and senior credits. The outcome will shape the narrative around progressive budgeting in a tight revenue environment.

Michigan Governor Floats ‘Sales Tax Holiday’ for School Supplies, Property Tax Refund for Seniors

By Danielle James

mlive.com (TNS)

Michigan Governor Gretchen Whitmer will reveal Wednesday afternoon the final budget proposal she’ll make as head of the state.

Ahead of her Feb. 11 budget presentation before a joint meeting of the state House and Senate, which will cover the 2027 fiscal year, she shared several sneak peeks. Among those is a new sales‑tax “holiday” on school supplies, along with a property‑tax relief proposal for seniors.

Both are part of what Whitmer’s office called a “Saving Michiganders Money Plan,” billed as a way to help several vulnerable populations nervous about the rising cost of groceries, housing, health care and utilities.

“As Michiganders face a lot of national economic uncertainty, we must work together to lower costs so they can pay the bills, put food on the table and provide for their kids,” Whitmer said.

Among the new proposals expected in Whitmer’s budget presentation is property‑tax relief for 355,000 senior residents. Her office said the plan would center around refunding approximately 10 % of senior property taxes, saving those households $345 a year on average.

It’s not yet clear how these proposals will affect state funding. Whitmer is expected to provide more details on the plan as part of her greater budget presentation on Wednesday, but it comes after state budget officials announced last month that lawmakers will have roughly $1 billion less in general‑fund revenues to allocate.

When referencing tax breaks for seniors, Whitmer also highlighted the recent completion of a “full rollback of the retirement tax” and an end to taxes on Social Security, both provisions previously passed. The phased approach to eliminate taxes on retirement income was signed into law in March 2023. Now fully in effect, Whitmer said it will put an average of $1,000 back into the pockets of almost 500,000 seniors.

The end to state taxes on tips, overtime and Social Security benefits was signed into law in October of last year. Whitmer said it would save 40,000 seniors “hundreds of dollars a year.”

The governor’s other new proposal—a new sales‑tax holiday on school supplies—comes after a July 2025 report found more than a third of parents surveyed said they couldn’t afford back‑to‑school shopping. About 44 % of them planned to take on debt to cover the cost.

“They need real relief to save them money now,” Whitmer said of Michigan parents, “especially on their paychecks, meals and education.”

The “targeted tax cut,” as Whitmer’s office describes it, would remove the 6 % sales tax from purchases of clothes, classroom items and computers. Savings would apply to both online and in‑person purchases.

Other items Whitmer said her budget proposal would continue are free pre‑K for all Michigan students and free breakfast and lunch for all 1.4 million public‑school attendees. She plans to pitch making free school meals permanent by law.

Whitmer also highlighted the Working Families Tax Credit, a previously‑passed bill that matched Michigan’s tax credit to the federal Earned Income Tax Credit at 30 %, up from 6 %. The average combined refund, according to Whitmer’s office, is $3,900 to 665,000 families.

Photo caption: Michigan Gov. Gretchen Whitmer speaks during the Detroit Auto Show at Huntington Place in Detroit on Jan. 15, 2026.