HOUSE BILL No. 4627

 

April 25, 2013, Introduced by Reps. Rutledge, Irwin, Geiss, Faris, Stallworth, Tlaib, Townsend, Lipton, Hovey-Wright, Ananich and Switalski and referred to the Committee on Transportation and Infrastructure.

 

     A bill to amend 1937 PA 94, entitled

 

"Use tax act,"

 

by amending section 3 (MCL 205.93), as amended by 2012 PA 408.

 

THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

 

     Sec. 3. (1) 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 total rate equal to 6% of the price of the property or

 

services specified in section 3a or 3b. The tax levied under this

 

act applies to a person who acquires tangible personal property or

 

services that are subject to the tax levied under this act for any

 

tax-exempt use who subsequently converts the tangible personal

 

property or service to a taxable use, including an interim taxable

 

use. If tangible personal property or services are converted to a

 

taxable use, the tax levied under this act shall be imposed without

 

regard to any subsequent tax-exempt use. 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 licensing and

 

regulatory affairs, 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, domestic partner, 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. As used in this subdivision, "domestic partner" means a

 

person, other than a spouse, with whom the transferor or purchaser

 

cohabits.

 

     (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 or of

 

the authority in the performance of its duties under this act, and

 

other departments or agencies of state government and the authority

 

are required to furnish those services, information, or records

 

upon the request of the department.

 

     (5) Beginning on October 1, 2015, the specific tax levied

 

under subsection (1) includes both a state component tax levied by

 

this state and a metropolitan areas component tax levied by the

 

authority at the following rates in each of the following state

 

fiscal years:

 

     (a) For fiscal year 2015-2016, the metropolitan areas

 

component rate is that rate calculated by the department of

 

treasury sufficient to generate $41,700,000.00 in revenue and the

 

state component rate is that rate determined by subtracting the

 

metropolitan areas component rate from 6%.

 


     (b) For fiscal year 2016-2017, the metropolitan areas

 

component rate is that rate calculated by the department of

 

treasury sufficient to generate $257,500,000.00 in revenue and the

 

state component rate is that rate determined by subtracting the

 

metropolitan areas component rate from 6%.

 

     (c) For fiscal year 2017-2018, the metropolitan areas

 

component rate is that rate calculated by the department of

 

treasury sufficient to generate $277,100,000.00 in revenue and the

 

state component rate is that rate determined by subtracting the

 

metropolitan areas component rate from 6%.

 

     (d) For fiscal year 2018-2019, the metropolitan areas

 

component rate is that rate calculated by the department of

 

treasury sufficient to generate $293,800,000.00 in revenue and the

 

state component rate is that rate determined by subtracting the

 

metropolitan areas component rate from 6%.

 

     (e) For fiscal year 2019-2020, the metropolitan areas

 

component rate is that rate calculated by the department of

 

treasury sufficient to generate $311,300,000.00 in revenue and the

 

state component rate is that rate determined by subtracting the

 

metropolitan areas component rate from 6%.

 

     (f) For fiscal year 2020-2021, the metropolitan areas

 

component rate is that rate calculated by the department of

 

treasury sufficient to generate $326,800,000.00 in revenue and the

 

state component rate is that rate determined by subtracting the

 

metropolitan areas component rate from 6%.

 

     (g) For fiscal year 2021-2022, the metropolitan areas

 

component rate is that rate calculated by the department of

 


treasury sufficient to generate $345,200,000.00 in revenue and the

 

state component rate is that rate determined by subtracting the

 

metropolitan areas component rate from 6%.

 

     (h) For fiscal year 2022-2023, the metropolitan areas

 

component rate is that rate calculated by the department of

 

treasury sufficient to generate $362,400,000.00 in revenue and the

 

state component rate is that rate determined by subtracting the

 

metropolitan areas component rate from 6%.

 

     (i) For fiscal year 2023-2024 and each fiscal year thereafter,

 

the metropolitan areas component rate is that rate calculated by

 

the department of treasury sufficient to generate the amount

 

distributed under this section in the immediately preceding year

 

adjusted by an industrial and commercial personal property growth

 

factor calculated by the department of treasury and the state

 

component rate is that rate determined by subtracting the

 

metropolitan areas component rate from 6%.

 

     (6) The state component includes the portion of the use tax

 

imposed at the additional rate of 2% approved by the electors of

 

this state on March 15, 1994 and dedicated for aid to schools under

 

section 21(2). The metropolitan areas component does not include

 

the portion of the use tax imposed at the additional rate of 2%

 

approved by the electors of this state on March 15, 1994.

 

     (7) The total combined rate of the tax levied by this state

 

and the authority under this act, including both the state

 

component and the metropolitan areas component, shall not exceed

 

6%.