HB-5621, As Passed House, May 22, 2018

HB-5621, As Passed Senate, May 17, 2018

SENATE SUBSTITUTE FOR

HOUSE BILL NO. 5621

     A bill to amend 1937 PA 94, entitled

"Use tax act,"

by amending section 14b (MCL 205.104b), as amended by 2015 PA 252.

THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

     Sec. 14b. (1) If an exemption from the tax under this act is

claimed, the seller shall obtain identifying information of the

purchaser and the reason for claiming the exemption at the time of

the purchase or at a later date. The seller shall obtain the same

information for a claimed exemption regardless of the medium in

which the transaction occurred.

     (2) A seller shall use a standard format for claiming an

exemption electronically as adopted by the governing board under

the streamlined sales and use tax agreement.

     (3) A purchaser is not required to provide a signature to

claim an exemption under this act unless a paper exemption form is

used.

     (4) A seller shall maintain a proper record of all exempt

transactions and shall provide them when requested by the

department.

     (5) A seller who complies with the requirements of this

section is not liable for the tax under this act if a purchaser

improperly claims an exemption. A purchaser who improperly claims

an exemption is liable for the tax due under this act. This

subsection does not apply if a seller does any of the following:

     (a) Fraudulently fails to collect the tax under this act.

     (b) Solicits a purchaser to make an improper claim for

exemption.

     (c) Accepts an exemption form when the purchaser claims an

entity-based exemption if both of the following occur:

     (i) The subject of the transaction sought to be covered by the

exemption form is actually received by the purchaser at a location

operated by the seller.

     (ii) The state in which the location operated by the seller is

located provides an exemption form that clearly and affirmatively

indicates that the claimed exemption is not available in that

state.

     (6) A seller who obtains a fully completed exemption form or

captures the relevant data elements as outlined in this section

within 120 days after the date of sale is not liable for the tax

under this act.

     (7) If the seller has not obtained an exemption form or all

relevant data elements, the seller may either prove that the

transaction was not subject to the tax under this act by other

means or obtain a fully completed exemption form from the

purchaser, by the later of the following:

     (a) 120 days after a request by the department.

     (b) The date an assessment becomes final.

     (c) The denial of a claim for refund.

     (d) In the instance of a credit audit, the issuance of an

audit determination letter or informal conference decision and

order of determination.

     (e) The date of a final order of the court of claims or the

Michigan tax tribunal, as applicable, with respect to an

assessment, order, or decision of the department.

     (8) The department may, in its discretion, allow a seller

additional time to comply with subsection (7).

     (9) A seller is not liable for the tax under this act if the

seller obtains a blanket exemption form for a purchaser with which

the seller has a recurring business relationship. Renewals of

blanket exemption forms or updates of exemption form information or

data elements are not required if there is a recurring business

relationship between the seller and the purchaser. For purposes of

this section, a recurring business relationship exists when a

period of not more than 12 months elapses between sales

transactions.

     (10) A purchaser that fails to claim an exemption at the time

of purchase by notifying the seller of the exemption and providing

a complete and proper claim of exemption may submit a claim for a

refund to the department for the tax related to that purchase if

all of the following conditions are met:

     (a) The claim for a refund is made within 4 years of the date

of purchase.

     (b) The purchaser submits to the department an accurate record

of the purchase, including, but not limited to, a paper,

electronic, or digital receipt, invoice, or purchase order related

to the sale, that includes the date of the purchase and the amount

of sales tax paid to the seller for which the purchaser is seeking

a refund under this subsection.

     (c) The purchaser submits to the department a form signed by

the seller as prescribed by the department that contains

information required by the department to substantiate the refund

claim. The form shall contain a statement that the seller reported

and paid the tax on the sale for which the purchaser is seeking a

refund under this subsection and that the seller has not claimed,

and will not claim, a refund of that tax.

     (d) The purchaser submits to the department a proper exemption

claim on a form as prescribed by the department under this

subsection.

     (e) The purchaser shall submit to the department any

additional information that the department may require related to

the purchaser's claim for refund under this subsection.

     Enacting section 1. This amendatory act takes effect January

1, 2019.