Bill Text: MI SB0126 | 2011-2012 | 96th Legislature | Engrossed

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Bill Title: Use tax; collections; use tax on difference between trade-in and purchase price for motor vehicles and titled watercraft; provide for. Amends sec. 2 of 1937 PA 94 (MCL 205.92).

Spectrum: Moderate Partisan Bill (Republican 25-8)

Status: (Engrossed - Dead) 2012-05-16 - Referred To Committee On Tax Policy [SB0126 Detail]

Download: Michigan-2011-SB0126-Engrossed.html

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SB-0126, As Passed Senate, May 16, 2012

 

 

 

 

 

 

 

 

 

 

 

 

SENATE BILL No. 126

 

 

February 9, 2011, Introduced by Senators ROBERTSON, BRANDENBURG, PROOS, MARLEAU, PAPPAGEORGE, GREEN, PAVLOV, HILDENBRAND, JANSEN, MOOLENAAR and CASPERSON and referred to the Committee on Finance.

 

 

 

     A bill to amend 1937 PA 94, entitled

 

"Use tax act,"

 

by amending section 2 (MCL 205.92), as amended by 2008 PA 439.

 

THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

 

     Sec. 2. As used in this act:

 

     (a) "Person" means an individual, firm, partnership, joint

 

venture, association, social club, fraternal organization,

 

municipal or private corporation whether or not organized for

 

profit, company, limited liability company, estate, trust,

 

receiver, trustee, syndicate, the United States, this state,

 

county, or any other group or combination acting as a unit, and the

 

plural as well as the singular number, unless the intention to give

 

a more limited meaning is disclosed by the context.

 

     (b) "Use" means the exercise of a right or power over tangible

 

personal property incident to the ownership of that property

 

including transfer of the property in a transaction where

 

possession is given. Converting tangible personal property acquired

 

for a use exempt from the tax levied under this act to a use not

 

exempt from the tax levied under this act is a taxable use.

 

     (c) "Storage" means a keeping or retention of property in this

 

state for any purpose after the property loses its interstate

 

character.

 

     (d) "Seller" means the person from whom a purchase is made and

 

includes every person selling tangible personal property or

 

services for storage, use, or other consumption in this state. If,

 

in the opinion of the department, it is necessary for the efficient

 

administration of this act to regard a salesperson, representative,

 

peddler, or canvasser as the agent of a dealer, distributor,

 

supervisor, or employer under whom the person operates or from whom

 

he or she obtains tangible personal property or services sold by

 

him or her for storage, use, or other consumption in this state,

 

irrespective of whether or not he or she is making the sales on his

 

or her own behalf or on behalf of the dealer, distributor,

 

supervisor, or employer, the department may so consider him or her,

 

and may consider the dealer, distributor, supervisor, or employer

 

as the seller for the purpose of this act.

 

     (e) "Purchase" means to acquire for a consideration, whether

 

the acquisition is effected by a transfer of title, of possession,

 

or of both, or a license to use or consume; whether the transfer is

 

absolute or conditional, and by whatever means the transfer is

 

effected; and whether consideration is a price or rental in money,

 

or by way of exchange or barter. Purchase includes converting

 

tangible personal property acquired for a use exempt from the tax

 

levied under this act to a use not exempt from the tax levied under

 

this act.

 

     (f) "Purchase price" or "price" means the total amount of

 

consideration paid by the consumer to the seller, including cash,

 

credit, property, and services, for which tangible personal

 

property or services are sold, leased, or rented, valued in money,

 

whether received in money or otherwise, and applies to the measure

 

subject to use tax. Purchase price includes the following

 

subparagraphs (i) through (vii) and excludes subparagraphs (viii)

 

through (x) (xii):

 

     (i) Seller's cost of the property sold.

 

     (ii) Cost of materials used, labor or service cost, interest,

 

losses, costs of transportation to the seller, taxes imposed on the

 

seller other than taxes imposed by this act, and any other expense

 

of the seller.

 

     (iii) Charges by the seller for any services necessary to

 

complete the sale, other than the following:

 

     (A) An amount received or billed by the taxpayer for

 

remittance to the employee as a gratuity or tip, if the gratuity or

 

tip is separately identified and itemized on the guest check or

 

billed to the customer.

 

     (B) Labor or service charges involved in maintenance and

 

repair work on tangible personal property of others if separately

 

itemized.

 

     (iv) Delivery charges incurred or to be incurred before the

 

completion of the transfer of ownership of tangible personal

 

property subject to the tax levied under this act from the seller

 

to the purchaser.

 

     (v) Installation charges incurred or to be incurred before the

 

completion of the transfer of ownership of tangible personal

 

property from the seller to the purchaser.

 

     (vi) Credit Except as otherwise provided in subparagraphs (xi)

 

and (xii), credit for any trade-in.

 

     (vii) Except as otherwise provided in subparagraph (x),

 

consideration received by the seller from third parties if all of

 

the following conditions are met:

 

     (A) The seller actually receives consideration from a party

 

other than the purchaser and the consideration is directly related

 

to a price reduction or discount on the sale.

 

     (B) The seller has an obligation to pass the price reduction

 

or discount through to the purchaser.

 

     (C) The amount of the consideration attributable to the sale

 

is fixed and determinable by the seller at the time of the sale of

 

the item to the purchaser.

 

     (D) One of the following criteria is met:

 

     (I) The purchaser presents a coupon, certificate, or other

 

documentation to the seller to claim a price reduction or discount

 

where the coupon, certificate, or documentation is authorized,

 

distributed, or granted by a third party with the understanding

 

that the third party will reimburse any seller to whom the coupon,

 

certificate, or documentation is presented.

 

     (II) The purchaser identifies himself or herself to the seller

 

as a member of a group or organization entitled to a price

 

reduction or discount. A preferred customer card that is available

 

to any patron does not constitute membership in a group or

 

organization.

 

     (III) The price reduction or discount is identified as a third

 

party price reduction or discount on the invoice received by the

 

purchaser or on a coupon, certificate, or other documentation

 

presented by the purchaser.

 

     (viii) Interest, financing, or carrying charges from credit

 

extended on the sale of personal property or services, if the

 

amount is separately stated on the invoice, bill of sale, or

 

similar document given to the purchaser.

 

     (ix) Any taxes legally imposed directly on the consumer that

 

are separately stated on the invoice, bill of sale, or similar

 

document given to the purchaser.

 

     (x) Beginning January 1, 2000, employee discounts that are

 

reimbursed by a third party on sales of motor vehicles.

 

     (xi) The agreed-upon value of a titled watercraft used as part

 

payment of the purchase price of a new titled watercraft or used

 

titled watercraft if the agreed-upon value is separately stated on

 

the invoice, bill of sale, or similar document given to the

 

purchaser.

 

     (xii) The agreed-upon value of a motor vehicle used as part

 

payment of the purchase price of a new or used motor vehicle if the

 

agreed-upon value is separately stated on the invoice, bill of

 

sale, or similar document given to the purchaser. As used in this

 

subparagraph, "new motor vehicle" means that term as defined in

 

section 33a of the Michigan vehicle code, 1949 PA 300, MCL 257.33a.

 

     (g) "Consumer" means the person who has purchased tangible

 

personal property or services for storage, use, or other

 

consumption in this state and includes, but is not limited to, 1 or

 

more of the following:

 

     (i) A person acquiring tangible personal property if engaged in

 

the business of constructing, altering, repairing, or improving the

 

real estate of others.

 

     (ii) A person who has converted tangible personal property or

 

services acquired for storage, use, or consumption in this state

 

that is exempt from the tax levied under this act to storage, use,

 

or consumption in this state that is not exempt from the tax levied

 

under this act.

 

     (h) "Business" means all activities engaged in by a person or

 

caused to be engaged in by a person with the object of gain,

 

benefit, or advantage, either direct or indirect.

 

     (i) "Department" means the department of treasury.

 

     (j) "Tax" includes all taxes, interest, or penalties levied

 

under this act.

 

     (k) "Tangible personal property" means personal property that

 

can be seen, weighed, measured, felt, or touched or that is in any

 

other manner perceptible to the senses and includes electricity,

 

water, gas, steam, and prewritten computer software.

 

     (l) "Textiles" means goods that are made of or incorporate

 

woven or nonwoven fabric, including, but not limited to, clothing,

 

shoes, hats, gloves, handkerchiefs, curtains, towels, sheets,

 

pillows, pillowcases, tablecloths, napkins, aprons, linens, floor

 

mops, floor mats, and thread. Textiles also include materials used

 

to repair or construct textiles, or other goods used in the rental,

 

sale, or cleaning of textiles.

 

     (m) "Interstate motor carrier" means a person who operates or

 

causes to be operated a qualified commercial motor vehicle on a

 

public road or highway in this state and at least 1 other state or

 

Canadian province.

 

     (n) "Qualified commercial motor vehicle" means that term as

 

defined in section 1(i), (j), and (k) of the motor carrier fuel tax

 

act, 1980 PA 119, MCL 207.211.

 

     (o) "Diesel fuel" means that term as defined in section 2(p)

 

of the motor fuel tax act, 2000 PA 403, MCL 207.1002.

 

     (p) "Sale" means a transaction by which tangible personal

 

property or services are purchased or rented for storage, use, or

 

other consumption in this state.

 

     (q) "Convert" means putting a service or tangible personal

 

property acquired for a use exempt from the tax levied under this

 

act at the time of acquisition to a use that is not exempt from the

 

tax levied under this act, whether the use is in whole or in part,

 

or permanent or not permanent. A motor vehicle purchased for resale

 

by a new vehicle dealer licensed under section 248(8)(a) of the

 

Michigan vehicle code, 1949 PA 300, MCL 257.248, and not titled in

 

the name of the dealer shall not be considered to be converted

 

prior to sale or lease by that dealer.