Bill Text: MI SB1100 | 2013-2014 | 97th Legislature | Engrossed

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Bill Title: Sales tax; other; requirement for use of certain anti-sales suppression devices for certain entities; provide for. Amends sec. 18 of 1933 PA 167 (MCL 205.68).

Spectrum: Partisan Bill (Republican 5-0)

Status: (Engrossed - Dead) 2014-12-02 - Referred To Committee On Tax Policy [SB1100 Detail]

Download: Michigan-2013-SB1100-Engrossed.html

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SB-1100, As Passed Senate, November 13, 2014

 

 

 

 

 

 

 

 

 

 

 

SUBSTITUTE FOR

 

SENATE BILL NO. 1100

 

 

 

 

 

 

 

 

 

 

 

     A bill to amend 1933 PA 167, entitled

 

"General sales tax act,"

 

by amending section 18 (MCL 205.68), as amended by 2014 PA 108.

 

THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

 

     Sec. 18. (1) A person liable for any tax imposed under this

 

act shall keep in a paper, electronic, or digital format an

 

accurate and complete beginning and annual inventory and purchase

 

records of additions to inventory, complete daily sales records,

 

receipts, invoices, bills of lading, and all pertinent documents in

 

a form the department requires. A person shall not destroy or alter

 

electronic records required to be maintained under this act or

 

under 1941 PA 122, MCL 205.1 to MCL 205.31. If an exemption from

 

the tax under this act is claimed by a person because the sale is

 

for resale at retail, a record shall be kept of the sales tax

 

license number if the person has a sales tax license. These records

 

shall be retained for a period of 4 years after the tax imposed

 

under this act to which the records apply is due or as otherwise

 

provided by law.

 

     (2) Beginning January 1, 2015 through December 31, 2017, the

 

department may require not more than 1,000 persons subject to the

 

tax under this act to maintain an anti-sales suppression device on

 

its cash register, electronic cash register, or any other point-of-

 

sale system in a manner prescribed by the department.

 

     (3) (2) If the department considers it necessary, the

 

department may require a person, by notice served upon that person,

 

to make a return, render under oath certain statements, or keep

 

certain records the department considers sufficient to show whether

 

or not that person is liable for the tax under this act.

 

     (4) (3) A person knowingly making a sale of tangible personal

 

property for the purpose of resale at retail to another person not

 

licensed under this act is liable for the tax under this act unless

 

the transaction is exempt under the provisions of section 4k.

 

     (5) (4) If the taxpayer fails to file a return or to maintain

 

or preserve sufficient records as prescribed in this section, or

 

the department has reason to believe that any records maintained or

 

returns filed are inaccurate or incomplete and that additional

 

taxes are due, the department may assess the amount of the tax due

 

from the taxpayer based on an indirect audit procedure or any other

 

information that is available or that may become available to the

 

department. That assessment is considered prima facie correct for

 

the purpose of this act and the burden of proof of refuting the

 

assessment is upon the taxpayer. An indirect audit of a taxpayer

 

under this subsection shall be conducted in accordance with 1941 PA

 

122, MCL 205.1 to 205.31, and the standards published by the

 

department under section 21 of 1941 PA 122, MCL 205.21, and shall

 

include all of the following elements:

 

     (a) A review of the taxpayer's books and records. The

 

department may use an indirect method to test the accuracy of the

 

taxpayer's books and records.

 

     (b) Both the credibility of the evidence and the

 

reasonableness of the conclusion shall be evaluated before any

 

determination of tax liability is made.

 

     (c) The department may use any method to reconstruct income,

 

deductions, or expenses that is reasonable under the circumstances.

 

The department may use third-party records in the reconstruction.

 

     (d) The department shall investigate all reasonable evidence

 

presented by the taxpayer refuting the computation.

 

     (6) (5) If a taxpayer has filed all the required returns and

 

has maintained and preserved sufficient records as required under

 

this section, the department shall not base a tax deficiency

 

determination or assessment on any indirect audit procedure unless

 

the department has a documented reason to believe that any records

 

maintained or returns filed are inaccurate or incomplete and that

 

additional taxes are due.

 

     (7) (6) If all the information is maintained as provided under

 

section 12, an exemption certificate is not required for an

 

exemption claim by the following:

 

     (a) A person licensed by the Michigan liquor control

 

commission as a wholesaler for purposes of sales of alcoholic

 

liquor to another person licensed by the Michigan liquor control

 

commission. As used in this subsection, "alcoholic liquor",

 

"authorized distribution agent", and "wholesaler" mean those terms

 

as defined in the Michigan liquor control code of 1998, 1998 PA 58,

 

MCL 436.1101 to 436.2303.

 

     (b) The Michigan liquor control commission or a person

 

certified by the commission as an authorized distribution agent for

 

purposes of the sale and distribution of alcoholic liquor to a

 

person licensed by the Michigan liquor control commission.

 

     (8) (7) For purposes of this act, a blanket exemption claim

 

covers all exempt transfers between the taxpayer and the buyer for

 

a period of 4 years or for a period of less than 4 years as stated

 

on the blanket exemption claim if that period is agreed to by the

 

buyer and taxpayer. Renewal of a blanket exemption claim or an

 

update of exemption claim information or data elements is not

 

required if there is a recurring business relationship between the

 

seller and the purchaser. For purposes of this subsection, a

 

recurring business relationship exists when a period of not more

 

than 12 months elapses between sales transactions.

 

     (9) (8) As used in this section:

 

     (a) "Anti-sales suppression device" means a tangible device,

 

software program, or any other means used to prevent or detect the

 

use of an automated sales suppression device or zapper, phantom-

 

ware, or a skimming device as those terms are defined in section

 

411w of the Michigan penal code, 1931 PA 328, MCL 750.411w.

 

     (b) (a) "Indirect audit procedure" is an audit method that

 

involves the determination of tax liabilities through an analysis

 

of a taxpayer's business activities using information from a range

 

of sources beyond the taxpayer's declaration and formal books and

 

records.

 

     (c) (b) "Sufficient records" means records that meet the

 

department's need to determine the tax due under this act.