Bill Text: MI SB0616 | 2015-2016 | 98th Legislature | Engrossed
Bill Title: Sales tax; exemptions; exemption for certain data center equipment; provide for. Amends sec. 12 of 1933 PA 167 (MCL 205.62) & adds sec. 4ee.
Spectrum: Partisan Bill (Republican 3-0)
Status: (Passed) 2015-12-31 - Assigned Pa 0251'15 With Immediate Effect [SB0616 Detail]
Download: Michigan-2015-SB0616-Engrossed.html
SB-0616, As Passed Senate, December 3, 2015
SUBSTITUTE FOR
SENATE BILL NO. 616
(As amended December 3, 2015)
A bill to amend 1933 PA 167, entitled
"General sales tax act,"
by amending section 12 (MCL 205.62), as amended by 2008 PA 438, and
by adding section 4ee.
THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
Sec. 4ee. (1) Beginning January 1, 2016 through December 31,
2030, a sale of data center equipment to the owner or operator of
an Internet data center or a colocated business for use or
consumption in the operations of the Internet data center is exempt
from the tax << >> under this act.
(2) As used in this section:
(a) "Colocated business" means a person that has entered into
a contract with the owner or operator of an Internet data center to
deploy and use data center equipment physically located within the
Internet data center for a period of 1 or more years.
(b) "Data center equipment" means high-technology equipment
consumed or used physically within an Internet data center
including, but not limited to, computers, servers, routers,
switches, peripheral computer devices, and their associated tools,
racks, shelving, cabling, and wiring. Data center equipment also
includes any construction materials used to construct the Internet
data center, including, but not limited to, any heating, cooling,
or ventilation fixtures, fire suppression systems, security
systems, and materials handling equipment. Data center equipment
also includes storage batteries, back-up generators, uninterrupted
power supply units, and other redundant power supply equipment.
Data center equipment does not include any equipment owned by a
third party that is used to supply the Internet data center's
primary power or any third-party communication nodes that are used
to connect an Internet data center to the exogenous Internet
environment.
(c) "High technology" means technology used in the creation,
storage, processing, or manipulation of digital data.
(d) "Internet data center" means a facility that satisfies all
of the following:
(i) The facility physically houses networked computer servers
assembled for the purpose of centralizing the storage, processing,
management, or dissemination of data owned or controlled by the
customers of the Internet data center.
(ii) The facility is specifically designed and constructed to
provide a high-security environment for the location of servers and
similar equipment.
(iii) The facility is owned or operated by an entity whose
primary business, or the primary business of its parent company, is
that of an Internet data center and that entity generates 75% or
more of its revenue from the operating and business of an Internet
data center.
Sec. 12. (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 the record if requested by the
department.
(5) A seller who complies with the requirements of this
section is not liable for the tax 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 fraudulently fails to collect the tax, solicits a
purchaser to make an improper claim for exemption, or accepts an
exemption form when the purchaser claims an entity-based exemption
if both of the following circumstances occur:
(a) 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.
(b) The state in which that 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.
(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 tax 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
Senate Bill No. 616 as amended December 3, 2015
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 certified service provider shall be considered a seller
under this section. As used in this section, "certified service
provider" means that term as defined in section 25 of the
streamlined sales and use tax administration act, 2004 PA 174, MCL
205.825.
<<Enacting section 1. The legislature shall annually appropriate
sufficient funds from the state general fund to the state school aid
fund created in section 11 of article IX of the state constitution of
1963 to fully compensate for any loss of revenue to the state school
aid fund resulting from the enactment of this amendatory act.>>
