HOUSE BILL No. 5196

 

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

 

nonexempt manner.

 

     (3) The following transfers or purchases are not subject to

 

use tax:

 

     (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

 

transferor.

 

     (b) A transaction or a portion of a transaction if the

 

transfer is a gift to a beneficiary in the administration of an

 

estate.

 

     (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

 

a claim.

 

     (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

 

department.

 

     (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

 

the decrease.

 

     (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

 

this act:

 

     (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

 

205.78.

 

     (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

 

identified.

 

     (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

 

prescription.

 

     (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.