HB-4930, As Passed Senate, June 11, 2009

SUBSTITUTE FOR

HOUSE BILL NO. 4930

     A bill to amend 1933 PA 167, entitled

"General sales tax act,"

by amending section 4x (MCL 205.54x), as amended by 2006 PA 17.

THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

     Sec. 4x. (1) A sale to a domestic air carrier of 1 or more of

the following is exempt from the tax under this act:

     (a) An aircraft that has a maximum certificated takeoff weight

of at least 6,000 pounds for use solely in the transport of air

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

     (b) Parts and materials, excluding shop equipment or fuel,

affixed or to be affixed to an aircraft that has a maximum

certificated takeoff weight of at least 6,000 pounds for use solely

in the transport of air cargo, passengers, or a combination of air

cargo and 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

a sale and prepurchase evaluation, or the purpose of prepurchase

evaluation and postsale customization, improvement, maintenance, or

repair 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 the sale

and the completion of any prepurchase evaluation, customization,

improvement, maintenance, or repair that is associated with the

sale, whichever is later.

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

this state before the sale and any prepurchase evaluation, or

prepurchase evaluation and postsale customization, are improvement,

maintenance, or repair that is associated with the sale is

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

in this state after the sale and any prepurchase evaluation, or

prepurchase evaluation and postsale customization, are improvement,

maintenance, or repair that is associated with the sale is

completed.

     (4) A sale of an aircraft to a person for subsequent lease to

a domestic air carrier operating under a certificate issued by the

federal aviation administration under 14 CFR 121, for use solely in

the regularly scheduled transport of passengers is exempt from the

tax under this act.

     (5) 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) "Customization" means any improvement, maintenance, or

repair that is performed on an aircraft that is associated with the

sale of the aircraft.

(c) (b) "Domestic air carrier" is limited to entities engaged

primarily in the commercial transport for hire of air cargo,

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

business activity.

(d) (c) "Prepurchase evaluation" means an examination of an

aircraft to provide a potential purchaser with information relevant

to the potential purchase.

House Bill No. 4930 as amended June 11, 2009

     (d) "Postsale customization" means any improvement,

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

transfer of ownership of the aircraft.

     (e) "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.

<<Enacting section 1. This amendatory act shall be retroactively

applied to transactions occurring after June 11, 2009.>>