October 25, 2007, Introduced by Senator BROWN and referred to the Committee on Finance.
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 and section 3d as added by 2007
PA 93; and to repeal acts and parts of acts.
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
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 Except as
otherwise provided in subsection
(2), beginning December 1, 2007 through December 31, 2014, 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) Beginning January 1, 2011 through December 31, 2014, the
use or consumption of the services set forth in subsection (1)
shall be collected at a rate equal to 3%, 2% of which shall be the
additional rate prescribed by section 8 of article IX of the state
constitution of 1963.
(3) (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.
(4) (3)
There is appropriated to the
department of treasury
for the 2006-2007 state fiscal year the sum of $100,000.00 to begin
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.
(5) (4)
The services set forth in
subsection (1) shall be
sourced as products as provided in section 20.
(6) (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. Section 3d of the use tax act, 1937 PA 94,
MCL 205.93d, is repealed effective January 1, 2015.