September 7, 2007, Introduced by Rep. Tobocman and referred to the Committee on Tax Policy.
A bill to amend 1937 PA 94, entitled
"Use tax act,"
by amending sections 3 and 4a (MCL 205.93 and 205.94a), as amended
by 2004 PA 172.
THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
Sec. 3. (1) There is levied upon and there shall be collected
from every person in this state a specific tax for the privilege of
using, storing, or consuming tangible personal property or services
in this state at a rate equal to 6% of the price of the property or
services specified in section 3a or 3b. Penalties and interest
shall be added to the tax if applicable as provided in this act.
For the purpose of the proper administration of this act and to
prevent the evasion of the tax levied under this act, all of the
following shall be presumed:
(a) That tangible personal property purchased is subject to
the tax if brought into this state within 90 days of the purchase
date and is considered as acquired for storage, use, or other
consumption in this state.
(b) That tangible personal property used solely for personal,
nonbusiness purposes that is purchased outside of this state and
that is not an aircraft is exempt from the tax levied under this
act if 1 or more of the following conditions are satisfied:
(i) The property is purchased by a person who is not a resident
of this state at the time of purchase and is brought into this
state more than 90 days after the date of purchase.
(ii) The property is purchased by a person who is a resident of
this state at the time of purchase and is brought into this state
more than 360 days after the date of purchase.
(2) The tax imposed by this section for the privilege of
using, storing, or consuming a vehicle, ORV, manufactured housing,
aircraft, snowmobile, or watercraft shall be collected before the
transfer of the vehicle, ORV, manufactured housing, aircraft,
snowmobile, or watercraft, except a transfer to a licensed dealer
or retailer for purposes of resale that arises by reason of a
transaction made by a person who does not transfer vehicles, ORVs,
manufactured housing, aircraft, snowmobiles, or watercraft in the
ordinary course of his or her business done in this state. The tax
on a vehicle, ORV, snowmobile, and watercraft shall be collected by
the secretary of state before the transfer of the vehicle, ORV,
snowmobile, or watercraft registration. The tax on manufactured
housing shall be collected by the department of consumer and
industry services, mobile home commission, or its agent before the
transfer of the certificate of title. The tax on an aircraft shall
be collected by the department of treasury. The price tax base of a
new or previously owned car or truck held for resale by a dealer
and that is not exempt under section 4(1)(c) is the purchase price
of the car or truck multiplied by 2.5% plus $30.00 per month
beginning with the month that the dealer uses the car or truck in a
(3) The following transfers or purchases are not subject to
(a) A transaction or a portion of a transaction if the
transferee or purchaser is the spouse, mother, father, brother,
sister, child, stepparent, stepchild, stepbrother, stepsister,
grandparent, grandchild, legal ward, or a legally appointed
guardian with a certified letter of guardianship, of the
(b) A transaction or a portion of a transaction if the
transfer is a gift to a beneficiary in the administration of an
(c) If a vehicle, ORV, manufactured housing, aircraft,
snowmobile, or watercraft that has once been subjected to the
Michigan sales or use tax is transferred in connection with the
organization, reorganization, dissolution, or partial liquidation
of an incorporated or unincorporated business and the beneficial
ownership is not changed.
(d) If an insurance company licensed to conduct business in
this state acquires ownership of a late model distressed vehicle as
defined in section 12a of the Michigan vehicle code, 1949 PA 300,
MCL 257.12a, through payment of damages in response to a claim or
when the person who owned the vehicle before the insurance company
reacquires ownership from the company as part of the settlement of
(4) The department may utilize the services, information, or
records of any other department or agency of state government in
the performance of its duties under this act, and other departments
or agencies of state government are required to furnish those
services, information, or records upon the request of the
(5) Any decrease in the rate of the tax levied under
subsection (1) on services subject to tax under this act shall
apply only to billings rendered on or after the effective date of
(6) As used in this section, "ORV" means that term as defined
in section 81101 of the natural resources and environmental
protection act, 1994 PA 451, MCL 324.81101.
Sec. 4a. The following are exempt from the tax levied under
(a) Rental receipts if the tangible personal property rented
or leased was previously subject to 1 of the following when
purchased by the lessor:
(i) This act.
(ii) The general sales tax act, 1933 PA 167, MCL 205.51 to
(b) Rental receipts if the tangible personal property rented
or leased was previously taxed under a sales or use tax act of
another state or a political subdivision of another state levied at
a rate of 6% or more.
(c) Specific charges for technical support or for adapting or
modifying prewritten computer software programs to a purchaser's
needs or equipment if those charges are separately stated and
(d) The sale of computer software originally designed for the
exclusive use and special needs of the purchaser.
(e) The sale of a commercial advertising element if the
commercial advertising element is used to create or develop a
print, radio, television, or other advertisement, the commercial
advertising element is discarded or returned to the provider after
the advertising message is completed, and the commercial
advertising element is custom developed by the provider for the
purchaser. As used in this subdivision, "commercial advertising
element" means a negative or positive photographic image, an
audiotape or videotape master, a layout, a manuscript, writing of
copy, a design, artwork, an illustration, retouching, and
mechanical or keyline instructions. This exemption does not include
black and white or full color process separation elements, an
audiotape reproduction, or a videotape reproduction.
(f) The sale of oxygen for human use dispensed pursuant to a
(g) The sale of insulin for human use.
(h) A meal provided free of charge or at a reduced rate to an
employee during work hours by a food service establishment licensed
by the department of agriculture.
(i) The sale of diesel fuel to a person who is an interstate
motor carrier for use in a qualified commercial motor vehicle.