USE TAX ACT (EXCERPT)
Act 94 of 1937
205.92b Additional definitions.
As used in this act:
(a) "Alcoholic beverage" means a beverage suitable for human consumption that contains 1/2 of 1% or more of alcohol by volume.
(b) "Computer" means an electronic device that accepts information in digital or similar form and manipulates it for a result based on a sequence of instructions.
(c) "Computer software" means a set of coded instructions designed to cause a computer or automatic data processing equipment to perform a task.
(d) "Delivered electronically" means delivered from the seller to the purchaser by means other than tangible storage media.
(e) "Delivery charges" means charges by the seller for preparation and delivery to a location designated by the purchaser of tangible personal property or services. Delivery charges include, but are not limited to, transportation, shipping, postage, handling, crating, and packing. Beginning September 1, 2004, delivery charges do not include the charges for delivery of direct mail if the charges are separately stated on an invoice or similar billing document given to the purchaser. If a shipment includes both exempt property and taxable property, the seller shall allocate the delivery charge using 1 of the following methods:
(i) Multiply the delivery price by a fraction, the numerator of which is the total sales prices of the taxable property and the denominator of which is the total sales prices of all property in the shipment.
(ii) Multiply the delivery price by a fraction, the numerator of which is the total weight of the taxable property and the denominator of which is the total weight of all property in the shipment.
(f) "Dental prosthesis" means a bridge, crown, denture, or other similar artificial device used to repair or replace intraoral defects such as missing teeth, missing parts of teeth, and missing soft or hard structures of the jaw or palate.
(g) "Dietary supplement" means any product, other than tobacco, intended to supplement the diet that is all of the following:
(i) Required to be labeled as a dietary supplement identifiable by the "supplemental facts" box found on the label as required by 21 CFR 101.36.
(ii) Contains 1 or more of the following dietary ingredients:
(A) A vitamin.
(B) A mineral.
(C) An herb or other botanical.
(D) An amino acid.
(E) A dietary substance for use by humans to supplement the diet by increasing the total dietary intake.
(F) A concentrate, metabolite, constituent, extract, or combination of any ingredient listed in sub-subparagraphs (A) through (E).
(iii) Intended for ingestion in tablet, capsule, powder, softgel, gelcap, or liquid form, or if not intended for ingestion in 1 of those forms, is not represented as conventional food or for use as a sole item of a meal or of the diet.
(h) "Direct mail" means printed material delivered or distributed by United States mail or other delivery service to a mass audience or to addresses on a mailing list provided by the purchaser or at the direction of the purchaser when the cost of the items is not billed directly to the recipients, including tangible personal property supplied directly or indirectly by the purchaser to the direct mail seller for inclusion in the package containing the printed material but not including multiple items of printed material delivered to a single address.
(i) "Drug" means a compound, substance, or preparation, or any component of a compound, substance, or preparation, other than food or food ingredients, dietary supplements, or alcoholic beverages, intended for human use that is 1 or more of the following:
(i) Recognized in the official United States Pharmacopoeia, official homeopathic pharmacopoeia of the United States, or official national formulary, or in any of their supplements.
(ii) Intended for use in the diagnosis, cure, mitigation, treatment, or prevention of disease.
(iii) Intended to affect the structure or any function of the body.
(j) "Durable medical equipment" means equipment for home use, other than mobility enhancing equipment, dispensed pursuant to a prescription, including durable medical equipment repair or replacement parts, that does all of the following:
(i) Can withstand repeated use.
(ii) Is primarily and customarily used to serve a medical purpose.
(iii) Is not useful generally to a person in the absence of illness or injury.
(iv) Is not worn in or on the body.
(k) "Durable medical equipment repair or replacement parts" includes all components or attachments used in conjunction with durable medical equipment.
(l) "Electronic" means relating to technology having electrical, digital, magnetic, wireless, optical, electromagnetic, or similar capabilities.
(m) "Lease or rental" means any transfer of possession or control of tangible personal property for a fixed or indeterminate term for consideration and may include future options to purchase or extend. This definition applies only to leases and rentals entered into after September 1, 2004 and has no retroactive impact on leases and rentals that existed on that date. Lease or rental does not include the following subparagraphs (i) through (iii) and includes subparagraph (iv):
(i) A transfer of possession or control of tangible personal property under a security agreement or deferred payment plan that requires the transfer of title upon completion of the required payments.
(ii) A transfer of possession or control of tangible personal property under an agreement requiring transfer of title upon completion of the required payments and payment of an option price that does not exceed $100.00 or 1% of the total required payments, whichever is greater.
(iii) The provision of tangible personal property along with an operator for a fixed or indeterminate period of time, where that operator is necessary for the equipment to perform as designed. To be necessary, an operator must do more than maintain, inspect, or set up the tangible personal property.
(iv) An agreement covering motor vehicles or trailers if the amount of consideration may be increased or decreased by reference to the amount realized upon sale or disposition of the property as defined in 26 USC 7701(h)(1).
(n) "Mobility enhancing equipment" means equipment, other than durable medical equipment or a motor vehicle or equipment on a motor vehicle normally provided by a motor vehicle manufacturer, dispensed pursuant to a prescription, including repair or replacement parts for that equipment, that is all of the following:
(i) Primarily and customarily used to provide or increase the ability to move from 1 place to another and is appropriate for use at home or on a motor vehicle.
(ii) Not generally used by a person with normal mobility.
(o) "Prescription" means an order, formula, or recipe, issued in any form of oral, written, electronic, or other means of transmission by a licensed physician or other health professional as defined in section 3501 of the insurance code of 1956, 1956 PA 218, MCL 500.3501. For a hearing aid, prescription includes an order, instruction, or direction of a hearing aid dealer or salesperson licensed under article 13 of the occupational code, 1980 PA 299, MCL 339.1301 to 339.1309.
(p) "Prewritten computer software" means computer software, including prewritten upgrades, that is delivered by any means and that is not designed and developed by the author or other creator to the specifications of a specific purchaser. Prewritten computer software includes all of the following:
(i) Any combination of 2 or more prewritten computer software programs or portions of prewritten computer software programs.
(ii) Computer software designed and developed by the author or other creator to the specifications of a specific purchaser if it is sold to a person other than that specific purchaser.
(iii) The modification or enhancement of prewritten computer software or portions of prewritten computer software where the modification or enhancement is designed and developed to the specifications of a specific purchaser unless there is a reasonable, separately stated charge or an invoice or other statement of the price is given to the purchaser for the modification or enhancement. If a person other than the original author or creator modifies or enhances prewritten computer software, that person is considered to be the author or creator of only that person's modifications or enhancements.
(q) "Prosthetic device" means a replacement, corrective, or supportive device, other than contact lenses and dental prosthesis, dispensed pursuant to a prescription, including repair or replacement parts for that device, worn on or in the body to do 1 or more of the following:
(i) Artificially replace a missing portion of the body.
(ii) Prevent or correct a physical deformity or malfunction of the body.
(iii) Support a weak or deformed portion of the body.
(r) "Tobacco" means cigarettes, cigars, chewing or pipe tobacco, or any other item that contains tobacco.
History: Add. 2004, Act 172, Eff. Sept. 1, 2004
Am. 2006, Act 428, Imd. Eff. Oct. 5, 2006
Am. 2008, Act 439, Imd. Eff. Jan. 9, 2009
Am. 2017, Act 220, Imd. Eff. Dec. 20, 2017
Compiler's Notes: Enacting section 1 of Act 220 of 2017 provides:"Enacting section 1. This amendatory act is retroactive and is effective beginning July 1, 2017."
© 2017 Legislative Council, State of Michigan