HB-6278, As Passed Senate, December 14, 2006

SUBSTITUTE FOR

HOUSE BILL NO. 6278

     A bill to amend 1937 PA 94, entitled

"Use tax act,"

by amending section 4q (MCL 205.94q), as amended by 2002 PA 456.

THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

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

the purchase of machinery and equipment for use or consumption in

the rendition of any combination of services, the use or

consumption of which is taxable under section  3a(a)  3a(1)(a) or

(c) or 3b except that this exemption is limited to the tangible

personal property located on the premises of the subscriber and to

central office equipment or wireless equipment, directly used or

consumed in transmitting, receiving, or switching, or in the

monitoring of switching of a 2-way interactive communication. As

used in this subsection, central office equipment or wireless

equipment does not include distribution equipment including cable

or wire facilities.

     (2) Beginning April 1, 1999, the property under subsection (1)

is exempt only to the extent that the property is used for the

exempt purposes stated in this section. There is an irrebuttable

presumption that 90% of total use is for exempt purposes.  This

presumption is in effect until April 1, 2006, at which time the

presumption shall be reviewed and redetermined by the department of

treasury using nonexempt and exempt user information for the

previous 12-month period. That redetermined irrebuttable

presumption shall be in effect for the following 7 years. The

irrebuttable presumption shall be reviewed and redetermined every 7

years after April 1, 2006 and applied to the following 7 years.