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 House, December 15, 2015
HOUSE SUBSTITUTE FOR
SENATE BILL NO. 616
(as amended December 15, 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) [subject to subsections (2) and (3), beginning]
January 1, 2016 through December 31,
2035, a sale of data center equipment to the owner or operator of a
qualified data center or a colocated business for assembly, use, or
consumption in the operations of the qualified data center or a
sale of data center equipment to a person engaged in the business
of constructing, altering, repairing, or improving real estate for
others to the extent the data center equipment is to be affixed to
or made a structural part of a qualified data center is exempt from
the tax under this act.
[(2) the exemption under this section only continues to apply after January 1, 2022, if the numbers gathered by the local economic development corporations are certified and reported to the department of talent and economic development and subsequently forwarded to the department and demonstrate that the qualified data centers, the colocated businesses, and the contractors of the qualified data centers, collectively, have, in aggregate, established in this state at least 400 data center industry jobs or data center industry related jobs, or a
combination of both, since January 1, 2016. The department of talent and economic development shall submit a report NO LATER THAN APRIL 1, 2022 related to the number of DATA CENTER INDUSTRY JOBS OR DATA CENTER INDUSTRY RELATED JOBS that have been established since january 1, 2016 TO THE SPEAKER AND MINORITY LEADER OF THE HOUSE OF REPRESENTATIVES, THE MAJORITY AND MINORITY LEADERS OF THE SENATE, AND THE GOVERNOR.
(3) THE EXEMPTION UNDER THIS SECTION ONLY continues to APPLy AFTER JANUARY 1, 2026, IF THE numbers gathered by the local economic development corporations are certified and reported to the DEPARTMENT OF TALENT AND ECONOMIC DEVELOPMENT and subsequently forwarded to the department and demonstrate THAT THE QUALIFIED DATA CENTERS, THE COLOCATED BUSINESSES, AND THE CONTRACTORS OF THE QUALIFIED DATA CENTERS, COLLECTIVELY, HAVE, IN AGGREGATE, ESTABLISHED in this state AT LEAST 1,000 DATA CENTER INDUSTRY JOBS OR DATA CENTER INDUSTRY RELATED JOBS, OR A COMBINATION OF BOTH, SINCE JANUARY 1, 2016. THE DEPARTMENT OF TALENT AND ECONOMIC DEVELOPMENT SHALL SUBMIT A REPORT NO LATER THAN APRIL 1, 2026 RELATED TO THE NUMBER OF DATA CENTER INDUSTRY JOBS OR DATA CENTER INDUSTRY RELATED JOBS THAT HAVE BEEN established SINCE JANUARY 1, 2016 TO THE SPEAKER AND MINORITY LEADER OF THE HOUSE OF REPRESENTATIVES, THE MAJORITY AND MINORITY LEADERS OF THE SENATE, AND THE GOVERNOR.
(4)] As used in this section:
(a) "Affiliate" means a person that directly, or indirectly
through 1 or more intermediaries, controls, is controlled by, or is
under common control with a specified person.
(b) "Colocated business" means a person that has entered into
a contract with the owner or operator of a qualified data center to
use or deploy data center equipment physically located within the
qualified data center for a period of 1 or more years.
(c) "Data center equipment" means only computers, servers,
routers, switches, peripheral computer devices, racks, shelving,
cabling, wiring, storage batteries, back-up generators,
uninterrupted power supply units, environmental control equipment,
other redundant power supply equipment, and prewritten computer
software used in operating, managing, or maintaining the qualified
data center or the business of the qualified data center or a
colocated business. Data center equipment also includes any
construction materials used or assembled under the qualified data
center's proprietary method for the construction or modification of
a qualified data center, including, but not limited to, building
materials, infrastructure, machinery, wiring, cabling, devices,
tools, and equipment that would otherwise be considered a fixture
or related equipment. Data center equipment does not include any
equipment owned by a third party that is used to supply the
qualified data center's primary power.
(d) "Qualified data center" means a facility composed of 1 or
more buildings located in this state and the facility is owned or
operated by an entity engaged at that facility in operating,
managing, or maintaining a group of networked computers or
networked facilities for the purpose of centralizing, or allowing 1
or more colocated businesses to centralize, the storage,
processing, management, or dissemination of data of 1 or more other
persons who is not an affiliate of the owner or operator of a
qualified data center or of a colocated business and that entity
receives 75% or more of its revenue from colocated businesses that
are not an affiliate of the owner or operator of the qualified 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
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.
