HB-4856, As Passed House, December 6, 2005

SUBSTITUTE FOR

HOUSE BILL NO. 4856

     A bill to amend 1937 PA 94, entitled

"Use tax act,"

by amending section 4k (MCL 205.94k), as amended by 2002 PA 669.

THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

     Sec. 4k. (1) The tax levied under this act does not apply to

parts and materials, excluding shop equipment or fuel, affixed to

or to be affixed to an aircraft owned or used by a domestic air

carrier that is any of the following:

     (a) An aircraft for use solely in the transport of air cargo

or a combination of air cargo and passengers that has a maximum

certificated takeoff weight of at least 12,500 pounds for taxes

levied before January 1, 1997 and at least 6,000 pounds for taxes

levied after December 31, 1996.

     (b) An aircraft that is used solely in the regularly scheduled

transport of passengers.

     (c) An aircraft other than an aircraft described in

subdivision (b), that has a maximum certificated takeoff weight of

at least 12,500 pounds for taxes levied before January 1, 1997 and

at least 6,000 pounds for taxes levied after December 31, 1996, and

that is designed to have a maximum passenger seating configuration

of more than 30 seats and is used solely in the transport of

passengers.

     (2) The tax levied under this act does not apply to the sale

of parts or materials, excluding shop equipment or fuel, affixed or

to be affixed to an aircraft that meets all of the following

conditions:

     (a) The aircraft leaves this state within 15 days after the

sooner of the issuance of the final billing or authorized approval

for final return to service, completion of the maintenance record

entry, and completion of the test flight and ground test for

inspection as required under 14 CFR 91.407.

     (b) The aircraft was not based in this state or registered in

this state before the parts or materials are affixed to the

aircraft and the aircraft is not based in this state or registered

in this state after the parts or materials are affixed to the

aircraft.

     (3) The tax levied under this act does not apply to the sale

of an aircraft temporarily located in this state for the purpose of

prepurchase evaluation or the purpose of prepurchase evaluation and

postsale customization if all of the following conditions are

satisfied:

     (a) The aircraft leaves this state within 15 days after

authorized approval for final return to service, completion of the

maintenance record entry, and completion of the test flight and

ground test for inspection as required under 14 CFR 91.407.

     (b) The aircraft was not based in this state or registered in

this state before the prepurchase evaluation or prepurchase

evaluation and postsale customization are completed and the

aircraft is not based in this state or registered in this state

after the prepurchase evaluation or prepurchase evaluation and

postsale customization are completed.

(4) (2)  For taxes levied after December 31, 1992, the tax

levied under this act does not apply to the storage, use, or

consumption of rolling stock used in interstate commerce and

purchased, rented, or leased by an interstate fleet motor carrier.

A refund for taxes paid before January 1, 1997 shall not be paid

under this subsection if the refund claim is made after June 30,

1997.

(5) (3)  For taxes levied after December 31, 1996 and before

May 1, 1999, the tax levied under this act does not apply to the

product of the out-of-state usage percentage and the price

otherwise taxable under this act of a qualified truck or a trailer

designed to be drawn behind a qualified truck, purchased, rented,

or leased in this state by an interstate fleet motor carrier and

used in interstate commerce.

(6) (4)  As used in this section:

     (a) "Based in this state" means hangared or stored in this

state for not less than 10 days in not less than 3 nonconsecutive

months during the immediately preceding 12-month period.

(b)  (a) "Domestic air carrier" means a person engaged

primarily in the commercial transport for hire of air cargo,

passengers, or a combination of air cargo and passengers as a

business activity.

(c)  (b) "Interstate fleet motor carrier" means a person

engaged in the business of carrying persons or property, other than

themselves, their employees, or their own property, for hire across

state lines, whose fleet mileage was driven at least 10% outside of

this state in the immediately preceding tax year.

(d)  (c) "Out-of-state usage percentage" is a fraction, the

numerator of which is the number of miles driven outside of this

state in the immediately preceding tax year by qualified trucks

used by the taxpayer and the denominator of which is the total

miles driven in the immediately preceding tax year by qualified

trucks used by the taxpayer. Miles driven by qualified trucks used

solely in intrastate commerce shall not be included in calculating

the out-of-state usage percentage.

     (e) "Prepurchase evaluation" means an examination of an

aircraft to provide a potential purchaser with information relevant

to the potential purchase.

     (f) "Postsale customization" means any improvement,

maintenance, or repair that is performed on an aircraft following a

transfer of ownership of the aircraft.

(g)  (d) "Qualified truck" means a commercial motor vehicle

power unit that has 2 axles and a gross vehicle weight rating in

excess of 10,000 pounds or a commercial motor vehicle power unit

that has 3 or more axles.

     (h) "Registered in this state" means an aircraft registered

with the state transportation department, bureau of aeronautics or

registered with the federal aviation administration to an address

located in this state.

(i)  (e) "Rolling stock" means a qualified truck, a trailer

designed to be drawn behind a qualified truck, and parts affixed to

either a qualified truck or a trailer designed to be drawn behind a

qualified truck.