Bill Text: MI HB6574 | 2009-2010 | 95th Legislature | Introduced

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Bill Title: Sales tax; exemptions; criteria for agricultural sales tax exemption for tangible personal property; clarify. Amends sec. 4a of 1933 PA 167 (MCL 205.54a).

Spectrum: Partisan Bill (Republican 1-0)

Status: (Introduced - Dead) 2010-11-30 - Printed Bill Filed 11/18/2010 [HB6574 Detail]

Download: Michigan-2009-HB6574-Introduced.html

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HOUSE BILL No. 6574

 

November 17, 2010, Introduced by Rep. Meekhof and referred to the Committee on Tax Policy.

 

     A bill to amend 1933 PA 167, entitled

 

"General sales tax act,"

 

by amending section 4a (MCL 205.54a), as amended by 2008 PA 415.

 

THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

 

     Sec. 4a. (1) Subject to subsection (2), the following are

 

exempt from the tax under this act:

 

     (a) A sale of tangible personal property not for resale to a

 

nonprofit school, nonprofit hospital, or nonprofit home for the

 

care and maintenance of children or aged persons operated by an

 

entity of government, a regularly organized church, religious, or

 

fraternal organization, a veterans' organization, or a corporation

 

incorporated under the laws of this state, if the income or benefit

 

from the operation does not inure, in whole or in part, to an

 

individual or private shareholder, directly or indirectly, and if

 

the activities of the entity or agency are carried on exclusively

 

for the benefit of the public at large and are not limited to the

 

advantage, interests, and benefits of its members or any restricted

 

group. A sale of tangible personal property to a parent cooperative

 

preschool is exempt from taxation under this act. As used in this

 

subdivision, "parent cooperative preschool" means a nonprofit,

 

nondiscriminatory educational institution, maintained as a

 

community service and administered by parents of children currently

 

enrolled in the preschool, that provides an educational and

 

developmental program for children younger than compulsory school

 

age, that provides an educational program for parents, including

 

active participation with children in preschool activities, that is

 

directed by qualified preschool personnel, and that is licensed

 

pursuant to 1973 PA 116, MCL 722.111 to 722.128.

 

     (b) A sale of tangible personal property not for resale to a

 

regularly organized church or house of religious worship, except

 

the following:

 

     (i) Sales in activities that are mainly commercial enterprises.

 

     (ii) Sales of vehicles licensed for use on public highways

 

other than a passenger van or bus with a manufacturer's rated

 

seating capacity of 10 or more that is used primarily for the

 

transportation of persons for religious purposes.

 

     (c) The sale of food to bona fide enrolled students by a

 

school or other educational institution not operated for profit.

 

     (d) The sale of a vessel designated for commercial use of

 

registered tonnage of 500 tons or more, if produced upon special

 

order of the purchaser, and bunker and galley fuel, provisions,

 

supplies, maintenance, and repairs for the exclusive use of the

 

vessel engaged in interstate commerce.

 

     (e) A sale of tangible personal property to persons engaged in

 

a business enterprise and using or consuming the tangible personal

 

property in the tilling, planting, caring for, or harvesting of the

 

things of the soil; in the breeding, raising, or caring for

 

livestock, poultry, or horticultural products, including transfers

 

of livestock, poultry, or horticultural products for further

 

growth; or in the direct gathering of fish, by net, line, or

 

otherwise only by an owner-operator of the business enterprise, not

 

including a charter fishing business enterprise. agricultural

 

production. This exemption includes a sale of tangible personal

 

property to a person who is a member of a unitary business group,

 

as that term is defined under section 117 of the Michigan business

 

tax act, 2007 PA 36, MCL 208.1117, whether or not that person's

 

business enterprise is agricultural production, if the tangible

 

personal property is used in agricultural production. This

 

exemption includes machinery that is capable of simultaneously

 

harvesting grain or other crops and biomass and machinery used for

 

the purpose of harvesting biomass. This exemption includes

 

agricultural land tile, which means fired clay or perforated

 

plastic tubing used as part of a subsurface drainage system for

 

land, and subsurface irrigation pipe, if the land tile or

 

irrigation pipe is used in the production of agricultural products

 

as a business enterprise. This exemption includes a portable grain

 

bin, which means a structure that is used or is to be used to

 

shelter grain and that is designed to be disassembled without

 

significant damage to its component parts. This exemption also

 

includes grain drying equipment and natural or propane gas used to

 

fuel that equipment for agricultural purposes. This exemption does

 

not include transfers of food, fuel, clothing, or any similar

 

tangible personal property for personal living or human

 

consumption. This exemption does not include tangible personal

 

property permanently affixed and becoming a structural part of real

 

estate. As used in this subdivision: , "biomass"

 

     (i) "Agricultural production" means the tilling, planting,

 

caring for, or harvesting of the things of the soil; the breeding,

 

raising, or caring for livestock, poultry, or horticultural

 

products, including transfers of livestock, poultry, or

 

horticultural products for further growth; or the direct gathering

 

of fish, by net, line, or otherwise only by an owner-operator of

 

the business enterprise, not including a charter fishing business

 

enterprise.

 

     (ii) "Biomass" means crop 1 or more of the following:

 

     (A) Crop residue used to produce energy. or agricultural

 

     (B) Agricultural crops grown specifically for the production

 

of energy.

 

     (C) Organic byproducts or waste from agricultural production.

 

     (f) The sale of a copyrighted motion picture film or a

 

newspaper or periodical admitted under federal postal laws and

 

regulations effective September 1, 1985 as second-class mail matter

 

or as a controlled circulation publication or qualified to accept

 

legal notices for publication in this state, as defined by law, or

 

any other newspaper or periodical of general circulation,

 

established not less than 2 years, and published not less than once

 

a week. Tangible personal property used or consumed in producing a

 

copyrighted motion picture film, a newspaper published more than 14

 

times per year, or a periodical published more than 14 times per

 

year, and not becoming a component part of that film, newspaper, or

 

periodical is subject to the tax. Tangible personal property used

 

or consumed in producing a newspaper published 14 times or less per

 

year or a periodical published 14 times or less per year and that

 

portion or percentage of tangible personal property used or

 

consumed in producing an advertising supplement that becomes a

 

component part of a newspaper or periodical is exempt from the tax

 

under this subdivision. A claim for a refund for taxes paid before

 

January 1, 1999, under this subdivision shall be made before June

 

30, 1999. For purposes of this subdivision, tangible personal

 

property that becomes a component part of a newspaper or periodical

 

and consequently not subject to tax includes an advertising

 

supplement inserted into and circulated with a newspaper or

 

periodical that is otherwise exempt from tax under this

 

subdivision, if the advertising supplement is delivered directly to

 

the newspaper or periodical by a person other than the advertiser,

 

or the advertising supplement is printed by the newspaper or

 

periodical.

 

     (g) A sale of tangible personal property to persons licensed

 

to operate commercial radio or television stations if the property

 

is used in the origination or integration of the various sources of

 

program material for commercial radio or television transmission.

 

This subdivision does not include a vehicle licensed and titled for

 

use on public highways or property used in the transmission to or

 

receiving from an artificial satellite.

 

     (h) The sale of a prosthetic device, durable medical

 

equipment, or mobility enhancing equipment.

 

     (i) The sale of a vehicle not for resale to a Michigan

 

nonprofit corporation organized exclusively to provide a community

 

with ambulance or fire department services.

 

     (j) A sale of tangible personal property to inmates in a penal

 

or correctional institution purchased with scrip or its equivalent

 

issued and redeemed by the institution.

 

     (k) A sale of textbooks sold by a public or nonpublic school

 

to or for the use of students enrolled in any part of a

 

kindergarten through twelfth grade program.

 

     (l) A sale of tangible personal property installed as a

 

component part of a water pollution control facility for which a

 

tax exemption certificate is issued pursuant to part 37 of the

 

natural resources and environmental protection act, 1994 PA 451,

 

MCL 324.3701 to 324.3708, or an air pollution control facility for

 

which a tax exemption certificate is issued pursuant to part 59 of

 

the natural resources and environmental protection act, 1994 PA

 

451, MCL 324.5901 to 324.5908.

 

     (m) The sale or lease of the following to an industrial

 

laundry after December 31, 1997:

 

     (i) Textiles and disposable products including, but not limited

 

to, soap, paper, chemicals, tissues, deodorizers and dispensers,

 

and all related items such as packaging, supplies, hangers, name

 

tags, and identification tags.

 

     (ii) Equipment, whether owned or leased, used to repair and

 

dispense textiles including, but not limited to, roll towel

 

cabinets, slings, hardware, lockers, mop handles and frames, and

 

carts.

 

     (iii) Machinery, equipment, parts, lubricants, and repair

 

services used to clean, process, and package textiles and related

 

items, whether owned or leased.

 

     (iv) Utilities such as electric, gas, water, or oil.

 

     (v) Production washroom equipment and mending and packaging

 

supplies and equipment.

 

     (vi) Material handling equipment including, but not limited to,

 

conveyors, racks, and elevators and related control equipment.

 

     (vii) Wastewater pretreatment equipment and supplies and

 

related maintenance and repair services.

 

     (n) A sale of tangible personal property to a person holding a

 

direct payment permit under section 8 of the use tax act, 1937 PA

 

94, MCL 205.98.

 

     (2) The tangible personal property under subsection (1) is

 

exempt only to the extent that that property is used for the exempt

 

purpose if one is stated in subsection (1). The exemption is

 

limited to the percentage of exempt use to total use determined by

 

a reasonable formula or method approved by the department.