SB-0845, As Passed Senate, November 1, 2007

SUBSTITUTE FOR

SENATE BILL NO. 845

     A bill to amend 1937 PA 94, entitled

"Use tax act,"

by amending sections 3 and 3d (MCL 205.93 and 205.93d), section 3

as amended by 2007 PA 103.

THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

     Sec. 3. (1) There Except as otherwise provided in this act,

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 rate

equal to 6% of the price of the property or services specified in

section 3a, or 3b, or 3d. 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, 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

Senate Bill No. 845 as amended November 1, 2007

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. 3d. (1) The Beginning <<December 20, 2007>>, the use or

consumption of the following services is taxed under this act in

the same manner as tangible personal property is taxed under this

act:

     (a) Carpet and upholstery cleaning services, as described in

NAICS industry code 56174.

     (b) Business service center services, as described in NAICS

industry code 56143.

     (c) Consulting services, as described in NAICS subsector code

5416.

     (d) Investigation, guard, and armored car services, as

described in NAICS industry code 56161.

     (e) Investment advice services, as described in NAICS industry

code 52393.

     (f) Janitorial services, as described in NAICS industry code

56172.

     (g) Landscaping services, as described in NAICS industry code

56173.

     (h) Office administration services, as described in NAICS

subsector code 5611.

     (i) All of the following personal services:

     (i) Astrology services.

     (ii) Baby shoe bronzing services.

     (iii) Bail bonding services.

     (iv) Balloon-o-gram services.

     (v) Coin-operated blood pressure testing machine services.

     (vi) Bondsperson services.

     (vii) Check room services.

     (viii) Coin-operated personal service machine services.

     (ix) Comfort station operation services.

     (x) Concierge services.

     (xi) Consumer buying services.

     (xii) Credit card notification services.

     (xiii) Dating services.

     (xiv) Discount buying services.

     (xv) Social escort services.

     (xvi) Fortune-telling services.

     (xvii) Genealogical investigation services.

     (xviii) House sitting services.

     (xix) Social introduction services.

     (xx) Coin-operated rental locker services.

     (xxi) Numerology services.

     (xxii) Palm reading services.

     (xxiii) Party planning services.

     (xxiv) Pay telephone services.

     (xxv) Personal fitness trainer services.

     (xxvi) Personal shopping services.

     (xxvii) Coin-operated photographic machine services.

     (xxviii) Phrenology services.

     (xxix) Porter services.

     (xxx) Psychic services.

     (xxxi) Rest room operation services.

     (xxxii) Shoeshine services.

     (xxxiii) Singing telegram services.

     (xxxiv) Wedding chapel services, but not churches.

     (xxxv) Wedding planning services.

     (j) Other travel and reservation services, as described in

NAICS industry code 56159.

     (k) Scenic transportation services, as described in NAICS

subsector code 487.

     (l) Skiing services, as described in NAICS industry code 71392.

     (m) Tour operator services, as described in NAICS industry

code 56152.

     (n) Warehousing and storage services, as described in NAICS

subsector code 4931.

     (o) Packaging and labeling services, as described in NAICS

industry code 56191.

     (p) Specialized design services, as described in NAICS

industry group code 5414.

     (q) Transit and ground passenger transport services, as

described in NAICS industry group code 4853.

     (r) Courier and messenger services, as described in NAICS

subsector code 492.

     (s) Personal care services, as described in NAICS industry

group code 8121, except hair care services.

     (t) Service contract services in which the seller, in exchange

for the buyer's single payment, agrees to provide repair,

maintenance, or replacement of 1 or more items of tangible personal

property during a specific period of time, which services the buyer

is not required to buy in connection with the purchase of tangible

personal property.

     (u) Security system services, as described in NAICS industry

code 56162.

     (v) Document preparation services, as described in NAICS

industry code 56141.

     (w) Miniwarehouse services and self-storage unit services, as

described in NAICS industry code 53113.

     (2) A service is subject to tax under this section based on

the description of that service in the applicable NAICS code and

not the classification of the establishment providing that service.

     (3) There is appropriated to the department of treasury for

the 2006-2007 state fiscal year the sum of $100,000.00 to begin

Senate Bill No. 845 as amended November 1, 2007

implementing the requirements of the amendatory act that added this

section. Any portion of this amount under this section that is not

expended in the 2006-2007 state fiscal year shall not lapse to the

general fund but shall be carried forward in a work project account

that is in compliance with section 451a of the management and

budget act, 1984 PA 431, MCL 18.1451a, for the following state

fiscal year.

     (4) The services set forth in subsection (1) shall be sourced

as products as provided in section 20.

     (5) As used in this section, "NAICS" means North American

industry classification system, 2002 as produced by the United

States office of management and budget.

<<Enacting section 1. This amendatory act does not take effect

unless Senate Bill No. 838 of the 94th Legislature is enacted into law.>>