Bill Text: MI HB4149 | 2015-2016 | 98th Legislature | Introduced
Bill Title: Use tax; collections; use tax on the difference; accelerate phase-in. Amends sec. 2 of 1937 PA 94 (MCL 205.92).
Spectrum: Partisan Bill (Republican 7-0)
Status: (Introduced - Dead) 2015-02-10 - Printed Bill Filed 02/06/2015 [HB4149 Detail]
Download: Michigan-2015-HB4149-Introduced.html
HOUSE BILL No. 4149
February 5, 2015, Introduced by Reps. Sheppard, Webber, Lyons, Iden, Leutheuser, Tedder and Lucido and referred to the Committee on Tax Policy.
A bill to amend 1937 PA 94, entitled
"Use tax act,"
by amending section 2 (MCL 205.92), as amended by 2013 PA 234.
THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
Sec. 2. As used in this act:
(a) "Person" means an individual, firm, partnership, joint
venture, association, social club, fraternal organization,
municipal or private corporation whether or not organized for
profit, company, limited liability company, estate, trust,
receiver, trustee, syndicate, the United States, this state,
county, or any other group or combination acting as a unit, and the
plural as well as the singular number, unless the intention to give
a more limited meaning is disclosed by the context.
(b) "Use" means the exercise of a right or power over tangible
personal property incident to the ownership of that property
including transfer of the property in a transaction where
possession is given. Converting tangible personal property acquired
for a use exempt from the tax levied under this act to a use not
exempt from the tax levied under this act is a taxable use.
(c) "Storage" means a keeping or retention of property in this
state for any purpose after the property loses its interstate
character.
(d) "Seller" means the person from whom a purchase is made and
includes every person selling tangible personal property or
services for storage, use, or other consumption in this state. If,
in the opinion of the department, it is necessary for the efficient
administration of this act to regard a salesperson, representative,
peddler, or canvasser as the agent of a dealer, distributor,
supervisor, or employer under whom the person operates or from whom
he or she obtains tangible personal property or services sold by
him or her for storage, use, or other consumption in this state,
irrespective of whether or not he or she is making the sales on his
or her own behalf or on behalf of the dealer, distributor,
supervisor, or employer, the department may so consider him or her,
and may consider the dealer, distributor, supervisor, or employer
as the seller for the purpose of this act.
(e) "Purchase" means to acquire for a consideration, whether
the acquisition is effected by a transfer of title, of possession,
or of both, or a license to use or consume; whether the transfer is
absolute or conditional, and by whatever means the transfer is
effected; and whether consideration is a price or rental in money,
or by way of exchange or barter. Purchase includes converting
tangible personal property acquired for a use exempt from the tax
levied under this act to a use not exempt from the tax levied under
this act.
(f) "Purchase price" or "price" means the total amount of
consideration paid by the consumer to the seller, including cash,
credit, property, and services, for which tangible personal
property or services are sold, leased, or rented, valued in money,
whether received in money or otherwise, and applies to the measure
subject to use tax. Purchase price includes the following
subparagraphs (i) through (vii) and excludes subparagraphs (viii)
through (xii):
(i) Seller's cost of the property sold.
(ii) Cost of materials used, labor or service cost, interest,
losses, costs of transportation to the seller, taxes imposed on the
seller other than taxes imposed by this act, and any other expense
of the seller.
(iii) Charges by the seller for any services necessary to
complete the sale, other than the following:
(A) An amount received or billed by the taxpayer for
remittance to the employee as a gratuity or tip, if the gratuity or
tip is separately identified and itemized on the guest check or
billed to the customer.
(B) Labor or service charges involved in maintenance and
repair work on tangible personal property of others if separately
itemized.
(iv) Delivery charges incurred or to be incurred before the
completion of the transfer of ownership of tangible personal
property subject to the tax levied under this act from the seller
to the purchaser.
(v) Installation charges incurred or to be incurred before the
completion of the transfer of ownership of tangible personal
property from the seller to the purchaser.
(vi) Except as otherwise provided in subparagraphs (xi) and
(xii), credit for any trade-in.
(vii) Except as otherwise provided in subparagraph (x),
consideration received by the seller from third parties if all of
the following conditions are met:
(A) The seller actually receives consideration from a party
other than the purchaser and the consideration is directly related
to a price reduction or discount on the sale.
(B) The seller has an obligation to pass the price reduction
or discount through to the purchaser.
(C) The amount of the consideration attributable to the sale
is fixed and determinable by the seller at the time of the sale of
the item to the purchaser.
(D) One of the following criteria is met:
(I) The purchaser presents a coupon, certificate, or other
documentation to the seller to claim a price reduction or discount
where the coupon, certificate, or documentation is authorized,
distributed, or granted by a third party with the understanding
that the third party will reimburse any seller to whom the coupon,
certificate, or documentation is presented.
(II) The purchaser identifies himself or herself to the seller
as a member of a group or organization entitled to a price
reduction or discount. A preferred customer card that is available
to any patron does not constitute membership in a group or
organization.
(III) The price reduction or discount is identified as a third
party price reduction or discount on the invoice received by the
purchaser or on a coupon, certificate, or other documentation
presented by the purchaser.
(viii) Interest, financing, or carrying charges from credit
extended on the sale of personal property or services, if the
amount is separately stated on the invoice, bill of sale, or
similar document given to the purchaser.
(ix) Any taxes legally imposed directly on the consumer that
are separately stated on the invoice, bill of sale, or similar
document given to the purchaser.
(x) Beginning January 1, 2000, employee discounts that are
reimbursed by a third party on sales of motor vehicles.
(xi) Beginning November 15, 2013, credit for the agreed-upon
value of a titled watercraft used as part payment of the purchase
price of a new titled watercraft or used titled watercraft
purchased from a watercraft dealer if the agreed-upon value is
separately stated on the invoice, bill of sale, or similar document
given to the purchaser. This subparagraph does not apply to leases
or rentals.
(xii) Beginning December 15, 2013, credit for the agreed-upon
value of a motor vehicle or recreational vehicle used as part
payment of the purchase price of a new motor vehicle or used motor
vehicle or recreational vehicle purchased from a new vehicle dealer
or used or secondhand vehicle dealer licensed under section 248 of
the Michigan vehicle code, 1949 PA 300, MCL 257.248, if the agreed-
upon value is separately stated on the invoice, bill of sale, or
similar document given to the purchaser. This subparagraph does not
apply to leases or rentals. For purposes of this subparagraph, the
agreed-upon value of a motor vehicle or recreational vehicle used
as part payment shall be limited as follows:
(A) Beginning December 15, 2013 through December 31, 2014,
subject
to sub-subparagraphs (B) and (C), the
lesser of the
following:
(I) $2,000.00.
(II) The agreed-upon value of the motor vehicle or
recreational vehicle used as part payment.
(B) Beginning January 1, 2015, subject to sub-subparagraphs
(C) and (D), the lesser of the following:
(I) $5,000.00.
(II) The agreed-upon value of the motor vehicle or
recreational vehicle used as part payment.
(C) (B)
Beginning January 1, 2015 2016 and
each January 1
thereafter,
the amount under sub-subparagraph (A)(I) (B)(I) shall
be
increased by an additional $500.00 $1,000.00 each year unless
section 105d of the social welfare act, 1939 PA 280, MCL 400.105d,
is repealed.
(D) (C)
Beginning on January 1, in the year
in which the
amount
under sub-subparagraph (A)(I) (B)(I)
exceeds $14,000.00 and
each January 1 thereafter, there shall be no limitation on the
agreed-upon value of the motor vehicle or recreational vehicle used
as part payment.
(g) "Consumer" means the person who has purchased tangible
personal property or services for storage, use, or other
consumption in this state and includes, but is not limited to, 1 or
more of the following:
(i) A person acquiring tangible personal property if engaged in
the business of constructing, altering, repairing, or improving the
real estate of others.
(ii) A person who has converted tangible personal property or
services acquired for storage, use, or consumption in this state
that is exempt from the tax levied under this act to storage, use,
or consumption in this state that is not exempt from the tax levied
under this act.
(h) "Business" means all activities engaged in by a person or
caused to be engaged in by a person with the object of gain,
benefit, or advantage, either direct or indirect.
(i) "Department" means the department of treasury.
(j) "Tax" includes all taxes, interest, or penalties levied
under this act.
(k) "Tangible personal property" means personal property that
can be seen, weighed, measured, felt, or touched or that is in any
other manner perceptible to the senses and includes electricity,
water, gas, steam, and prewritten computer software.
(l) "Textiles" means goods that are made of or incorporate
woven or nonwoven fabric, including, but not limited to, clothing,
shoes, hats, gloves, handkerchiefs, curtains, towels, sheets,
pillows, pillowcases, tablecloths, napkins, aprons, linens, floor
mops, floor mats, and thread. Textiles also include materials used
to repair or construct textiles, or other goods used in the rental,
sale, or cleaning of textiles.
(m) "Interstate motor carrier" means a person who operates or
causes to be operated a qualified commercial motor vehicle on a
public road or highway in this state and at least 1 other state or
Canadian province.
(n) "Qualified commercial motor vehicle" means that term as
defined in section 1(i), (j), and (k) of the motor carrier fuel tax
act, 1980 PA 119, MCL 207.211.
(o) "Diesel fuel" means that term as defined in section 2(p)
of the motor fuel tax act, 2000 PA 403, MCL 207.1002.
(p) "Sale" means a transaction by which tangible personal
property or services are purchased or rented for storage, use, or
other consumption in this state.
(q) "Convert" means putting a service or tangible personal
property acquired for a use exempt from the tax levied under this
act at the time of acquisition to a use that is not exempt from the
tax levied under this act, whether the use is in whole or in part,
or permanent or not permanent. A motor vehicle purchased for resale
by a new vehicle dealer licensed under section 248(8)(a) of the
Michigan vehicle code, 1949 PA 300, MCL 257.248, and not titled in
the name of the dealer shall not be considered to be converted
prior to sale or lease by that dealer.
(r) "New motor vehicle" means that term as defined in section
33a of the Michigan vehicle code, 1949 PA 300, MCL 257.33a.
(s) "Recreational vehicle" means that term as defined in
section 49a of the Michigan vehicle code, 1949 PA 300, MCL 257.49a.
(t) "Dealer" means a person licensed as a new vehicle dealer
or as a used or secondhand vehicle dealer under section 248 of the
Michigan vehicle code, 1949 PA 300, MCL 257.248.
(u) "Watercraft dealer" means a dealer as that term is defined
in section 80102 of the natural resources and environmental
protection act, 1994 PA 451, MCL 324.80102.
