SENATE BILL No. 1365

 

 

November 8, 2012, Introduced by Senator WARREN and referred to the Committee on Finance.

 

 

 

     A bill to amend 1937 PA 94, entitled

 

"Use tax act,"

 

by amending sections 3 and 21 (MCL 205.93 and 205.111), section 3

 

as amended by 2007 PA 103 and section 21 as amended by 2010 PA 37.

 

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 in this

 

state at a total rate equal to 6% of the price of the property or

 

services specified in section 3a or 3b. The tax levied under this

 

act applies to a person who acquires tangible personal property or

 

services that are subject to the tax levied under this act for any

 

tax-exempt use who subsequently converts the tangible personal

 

property or service to a taxable use, including an interim taxable

 

use. If tangible personal property or services are converted to a


 

taxable use, the tax levied under this act shall be imposed without

 

regard to any subsequent tax-exempt use. 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, 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 licensing and regulatory affairs, 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.

 

     Sec. 21. (1) Except as provided in subsections (2) and (3),

 

all money received and collected under this act shall be deposited

 

by the department of treasury in the state treasury to the credit

 

of the general fund, to be disbursed only by appropriations by the

 

legislature.

 

     (2) The collections from the use tax imposed at the additional


 

rate of 2% approved by the electors March 15, 1994 shall be

 

deposited in the state school aid fund established in section 11 of

 

article IX of the state constitution of 1963.

 

     (3) For the fiscal year ending September 30, 2010 only,

 

$9,500,000.00 shall be deposited by the department of treasury into

 

the Michigan promotion fund. As used in this subsection, "Michigan

 

promotion fund" means the fund created in section 39 of the

 

Michigan strategic fund act, 1984 PA 270, MCL 125.2039.