NOTICE REGARDING AMENDMENT TO MICHIGAN BEVERAGE CONTAINER LAW

Issued:  January 5, 2023

The Michigan Beverage Container Law, MCL 445.571 et seq. (commonly known as the Bottle Bill) was recently amended by the passage of Public Act 198 of 2022.  The amendments are effective January 1, 2023.

Public Act 198 addresses an issue faced by certain beverage distributors who, typically because of their geographical location, are consistent “over-redeemers” of bottle deposits.  This means that they refund more money in deposits on returned containers than they collect on beverages sold.  In some cases, the difference on even a quarterly basis amounts to a significant amount of money and, prior to this legislation, no formal mechanism existed under the law to reimburse over-redeemers for excess deposit funds paid out.

Public Act 198 permits over-redeemers to request a refund from Treasury for any calendar quarter in which the total value of deposit refunds made by that entity to participating customers exceeds the total value of deposits collected in that quarter from the entity’s participating customers.  “Participating customer” is defined as a customer from whom a distributor or manufacturer collects a deposit under the Bottle Bill on every beverage container sold to the customer.  In addition, the legislation requires Treasury to automatically pay refunds to over-redeemers on an annual basis.

The legislation terminates the previous procedure of allowing credits to over-redeemers to be used within three future years.  Credits are now limited to years prior to 2022, so no new credits will be permitted beginning with the filing of the 2022 annual report.  Instead, over-redeemers will receive automatic refunds of the balance over-redeemed.  However, credits carried forward from years prior to 2022 will still be available to be used by filers for the full three years.

Please note that quarterly refunds can only be requested or claimed by over-redeemers beginning January 1, 2023, for years after 2022.  This means that the first quarter for which a quarterly refund may be requested from Treasury is the first quarter of 2023.  Form 5817 will be used for quarterly refund requests, and this new form will be available on Treasury’s website by the end of the first quarter of 2023.  Filers may not request a refund for any overpayment or over-redemption amount from a year prior to 2022 that remains on the system as an available credit.  As noted above, credits from prior years can still be used for three years before they expire.  Filers who are over-redeemers for 2022 will receive automatic refunds from Treasury.

Questions regarding the amendments to the Bottle Law may be directed to:

Michigan Department of Treasury

Special Taxes Division/Misc. Taxes and Fees

Phone:  517-636-0515

Email:  Treas_MiscTaxesFees@michigan.gov