Bill Text: MI HB5913 | 2017-2018 | 99th Legislature | Introduced
Bill Title: Sales tax; exemptions; tax-exempt status for 501(c)(19) organizations; provide for. Amends sec. 4q of 1933 PA 167 (MCL 205.54q).
Spectrum: Partisan Bill (Republican 1-0)
Status: (Passed) 2018-12-31 - Assigned Pa 530'18 With Immediate Effect [HB5913 Detail]
Download: Michigan-2017-HB5913-Introduced.html
HOUSE BILL No. 5913
May 1, 2018, Introduced by Reps. Bizon, Maturen, Leutheuser, Vaupel, Kahle, Byrd, Yancey, Wentworth, Theis, Marino, Inman and Hughes and referred to the Committee on Tax Policy.
A bill to amend 1933 PA 167, entitled
"General sales tax act,"
by amending section 4q (MCL 205.54q), as amended by 2012 PA 573.
THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
Sec. 4q. (1) A sale of tangible personal property not for
resale to the following, subject to subsection (5), is exempt from
the tax under this act:
(a) A health, welfare, educational, cultural arts, charitable,
or benevolent organization not operated for profit that has been
issued an exemption ruling letter to purchase items exempt from tax
before July 17, 1998 signed by the administrator of the sales, use,
and withholding taxes division of the department.
(b) An organization not operated for profit and exempt from
federal income tax under section 501(c)(3) or 501(c)(4) of the
internal revenue code, 26 USC 501.
(c) An organization not operated for profit and exempt from
federal income tax under section 501(c)(19) of the internal revenue
code, 26 USC 501.
(2) The exemptions provided for in subsection (1) do not apply
to any of the following:
(a) Sales of tangible personal property and sales of vehicles
licensed for use on public highways that are not used primarily to
carry out the purposes of the organization or to raise funds or
obtain resources necessary to carry out the purposes of the
organization as stated in the bylaws or articles of incorporation
of the exempt entity.
(b) Sales of tangible personal property or vehicles used for
purposes of raising funds or obtaining resources where the sales
price exceeds $5,000.00 or the cap established in section 4o(3) for
an organization exempt under section 501(c)(19) of the internal
revenue code, 26 USC 501.
(3) At the time of the transfer of the tangible personal
property exempt under subsection (1), the transferee shall do 1 of
the following:
(a) Present the exemption ruling letter signed by the
administrator of the sales, use, and withholding taxes division of
the department certifying that the property is to be used or
consumed in connection with the operation of the organization.
(b) Present a signed statement, on a form approved by the
department, stating that the property is to be used or consumed in
connection with the operation of the organization, to carry out the
purpose or purposes of the organization, or to raise funds or
obtain resources necessary for the operation of the organization,
that the organization qualifies as an exempt organization under
this section, and that the sales price of any single item of
tangible personal property or vehicle purchased for purposes of
raising funds or obtaining resources does not exceed $5,000.00 or
the cap established in section 4o(3) for an organization exempt
under section 501(c)(19) of the internal revenue code, 26 USC 501.
The transferee shall also provide to the transferor a copy of the
federal exemption letter. However, a copy of the federal exemption
letter is not required if the organization is exempt from filing an
application for exempt status with the internal revenue service.
(4) The letter provided under subsection (3)(a) and the
statement with the accompanying letter provided under subsection
(3)(b) shall be accepted by all courts as prima facie evidence of
the exemption and the statement shall provide that if the claim for
tax exemption is disallowed, the transferee will reimburse the
transferor for the amount of tax involved.
(5) The tangible personal property under subsection (1) is
exempt only to the extent that the property is used to carry out
the purposes of the organization or to raise funds or obtain
resources necessary to carry out the purposes of the organization
as stated in the organization's bylaws or articles of
incorporation. The exemption for purposes of carrying out the
purposes of the organization as stated in its bylaws or articles of
incorporation is limited to the percentage of exempt use to total
use determined by a reasonable formula or method approved by the
department. The exemption for any single item of tangible personal
property or vehicle used to raise funds or obtain resources is
limited to a sales price that does not exceed $5,000.00 or the cap
established in section 4o(3) for an organization exempt under
section 501(c)(19) of the internal revenue code, 26 USC 501.
Enacting section 1. This amendatory act takes effect 90 days
after the date it is enacted into law.
