HOUSE BILL NO. 6489
December 02, 2020, Introduced by Reps. Green
and Hoitenga and referred to the Committee on Tax Policy.
A bill to amend 1933 PA 167, entitled
"General sales tax act,"
by amending section 4v (MCL 205.54v), as amended by 2006 PA 669, and by adding section 4jj.
the people of the state of michigan enact:
Sec. 4v. (1) The
tax levied under this act does not apply to the purchase of machinery and
equipment for use or consumption in the rendition of any combination of
services, the use or consumption of which is taxable under section 3a(1)(a) or
(c) or section 3b of the use tax act, 1937 PA 94, MCL 205.93a and 205.93b,
except that this exemption is limited to the tangible personal property located
on the premises of the subscriber and to central office equipment or wireless
equipment, directly used or consumed in transmitting, receiving, or switching,
or in the monitoring of switching of a 2-way interactive communication. As used
in this subsection, central office equipment or wireless equipment does not
include distribution equipment including cable or wire facilities.
(2) Beginning April 1, 1999, the property under subsection
(1) is exempt only to the extent that the property is used for the exempt purposes
stated in this section. There is an irrebuttable presumption that 90% of total
use is for exempt purposes.
(3) This section does not limit an exemption claimed under section 4jj.
Sec. 4jj. (1) A person subject to the tax under this act may
exclude from the gross proceeds used for the computation of the tax the sale of
any of the following to a qualified taxpayer or a member of a qualified
taxpayer's affiliated group as that term is defined in section 603 of the
income tax act of 1967, 1967 PA 281, MCL 206.603:
(a) Tangible
personal property classified as central office equipment, station equipment or
apparatus, station connection, wiring, or large private branch exchanges according
to the uniform system of accounts for telecommunications companies, 47 CFR part
32, 51 FR 43498 (December 2, 1986), as amended by 53 FR 30058 (August 10, 1988).
(c) Personal property and equipment that may be used in
or be part of a national, regional, or local headend or similar facility
operated by a person furnishing video service, cable radio service, satellite
television or radio service, or internet access service.
(2) As used in this section:
(a) "Headend" means
a master facility for receiving and retransmitting signals
for processing and distribution over a network. The
facility is typically a secured structure housing
electronic equipment used to receive and retransmit video, internet, or other
signals over a network.
(b) "Qualified
taxpayer" means a person who meets 1 of the following requirements:
(i) Uses or consumes the property for which an exemption is claimed
under this section in the rendition of any combination of services, the use or
consumption of which is taxable under section 3a(1)(a) or (c) or section 3b of
the use tax act, 1937 PA 94, MCL 205.93a and 205.93b.
(ii) Uses or consumes the property for which an exemption is claimed
under this section to furnish 1 or any combination of
the following:
(A) Video service.
(B) Internet access services.
(C) VOIP service.