HB-4558, As Passed House, May 20, 2015
May 5, 2015, Introduced by Rep. Townsend and referred to the Committee on Tax Policy.
A bill to amend 1937 PA 94, entitled
"Use tax act,"
by amending section 3 (MCL 205.93), as amended by 2014 PA 80.
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, including both the
local community stabilization share and the state share, for the
privilege of using, storing, or consuming tangible personal
property in this state at a total combined 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, 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 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 share tax levied by this
state and a local community stabilization share tax authorized by
the
amendatory act that added section 2c 2014 PA 80 and levied by
the authority, which replaces the reduced state share at the
following rates in each of the following state fiscal years:
(a) For fiscal year 2015-2016, the local community
stabilization share tax rate to be levied by the authority is that
rate calculated by the department of treasury on behalf of the
authority
sufficient to generate $96,100,000.00 $96,400,000.00 in
revenue and the state share tax rate is that rate determined by
subtracting the local community stabilization share tax rate from
6%.
(b) For fiscal year 2016-2017, the local community
stabilization share tax rate to be levied by the authority is that
rate calculated by the department of treasury on behalf of the
authority
sufficient to generate $380,600,000.00 $380,900,000.00 in
revenue and the state share tax rate is that rate determined by
subtracting the local community stabilization share tax rate from
6%.
(c) For fiscal year 2017-2018, the local community
stabilization share tax rate to be levied by the authority is that
rate calculated by the department of treasury on behalf of the
authority
sufficient to generate $410,500,000.00 $410,800,000.00 in
revenue and the state share tax rate is that rate determined by
subtracting the local community stabilization share tax rate from
6%.
(d) For fiscal year 2018-2019, the local community
stabilization share tax rate to be levied by the authority is that
rate calculated by the department of treasury on behalf of the
authority
sufficient to generate $437,700,000.00 $438,000,000.00 in
revenue and the state share tax rate is that rate determined by
subtracting the local community stabilization share tax rate from
6%.
(e) For fiscal year 2019-2020, the local community
stabilization share tax rate to be levied by the authority is that
rate calculated by the department of treasury on behalf of the
authority sufficient to generate $465,900,000.00 in revenue and the
state share tax rate is that rate determined by subtracting the
local community stabilization share tax rate from 6%.
(f) For fiscal year 2020-2021, the local community
stabilization share tax rate to be levied by the authority is that
rate calculated by the department of treasury on behalf of the
authority sufficient to generate $491,500,000.00 in revenue and the
state share tax rate is that rate determined by subtracting the
local community stabilization share tax rate from 6%.
(g) For fiscal year 2021-2022, the local community
stabilization share tax rate to be levied by the authority is that
rate calculated by the department of treasury on behalf of the
authority sufficient to generate $521,300,000.00 in revenue and the
state share tax rate is that rate determined by subtracting the
local community stabilization share tax rate from 6%.
(h) For fiscal year 2022-2023, the local community
stabilization share tax rate to be levied by the authority is that
rate calculated by the department of treasury on behalf of the
authority sufficient to generate $548,000,000.00 in revenue and the
state share tax rate is that rate determined by subtracting the
local community stabilization share tax rate from 6%.
(i) For fiscal year 2023-2024, the local community
stabilization share tax rate to be levied by the authority is that
rate calculated by the department of treasury on behalf of the
authority sufficient to generate $561,700,000.00 in revenue and the
state share tax rate is that rate determined by subtracting the
local community stabilization share tax rate from 6%.
(j) For fiscal year 2024-2025, the local community
stabilization share tax rate to be levied by the authority is that
rate calculated by the department of treasury on behalf of the
authority sufficient to generate $569,800,000.00 in revenue and the
state share tax rate is that rate determined by subtracting the
local community stabilization share tax rate from 6%.
(k) For fiscal year 2025-2026, the local community
stabilization share tax rate to be levied by the authority is that
rate calculated by the department of treasury on behalf of the
authority sufficient to generate $571,400,000.00 in revenue and the
state share tax rate is that rate determined by subtracting the
local community stabilization share tax rate from 6%.
(l) For fiscal year 2026-2027, the local community
stabilization share tax rate to be levied by the authority is that
rate calculated by the department of treasury on behalf of the
authority sufficient to generate $572,200,000.00 in revenue and the
state share tax rate is that rate determined by subtracting the
local community stabilization share tax rate from 6%.
(m) For fiscal year 2027-2028, the local community
stabilization share tax rate to be levied by the authority is that
rate calculated by the department of treasury on behalf of the
authority sufficient to generate $572,600,000.00 in revenue and the
state share tax rate is that rate determined by subtracting the
local community stabilization share tax rate from 6%.
(n) For fiscal year 2028-2029 and each fiscal year thereafter,
the local community stabilization share tax rate to be levied by
the authority is that rate calculated by the department of treasury
on behalf of the authority sufficient to generate the amount
distributed under this section in the immediately preceding year
adjusted by the personal property growth factor and the state share
tax rate is that rate determined by subtracting the local community
stabilization share tax rate from 6%.
(6) The state share 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 local community stabilization share 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 share,
as
reduced by the amendatory act that added this subsection, 2014
PA 80, and the local community stabilization share, shall not
exceed the constitutional limit of 6% under section 8 of article IX
of the state constitution of 1963. The authority shall not increase
any tax or tax rate, but is authorized to and shall levy the local
community stabilization share at the rate provided in subsection
(5).