HB-4351, As Passed House, September 27, 2018

HB-4351, As Passed Senate, September 26, 2018

SUBSTITUTE FOR

HOUSE BILL NO. 4351

     A bill to amend 1933 PA 167, entitled

"General sales tax act,"

by amending section 4x (MCL 205.54x), as amended by 2009 PA 53.

THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

     Sec. 4x. (1) A sale to a domestic air carrier of 1 or more of

the following is exempt from the tax under this act:

     (a) An aircraft that has a maximum certificated takeoff weight

of at least 6,000 pounds for use solely in the transport of air

cargo, passengers, or a combination of air cargo and passengers.

     (b) Parts and materials, excluding shop equipment or fuel,

affixed or to be affixed to an aircraft that has a maximum

certificated takeoff weight of at least 6,000 pounds for use solely

in the transport of air cargo, passengers, or a combination of air

cargo and passengers.The tax levied under this act does not apply

to the sale of an aircraft to a domestic air carrier if the

aircraft has a maximum certificated takeoff weight of at least

6,000 pounds and is for use solely in the transport of air cargo,

passengers, or a combination of air cargo and passengers.

     (2) The tax levied under this act does not apply to the sale

of parts or materials, excluding shop equipment or fuel, affixed or

to be affixed to an aircraft. that meets all of the following

conditions:

     (a) The aircraft leaves this state within 15 days after the

sooner of the issuance of the final billing or authorized approval

for final return to service, completion of the maintenance record

entry, and completion of the test flight and ground test for

inspection as required under 14 CFR 91.407.

     (b) The aircraft was not based in this state or registered in

this state before the parts or materials are affixed to the

aircraft and the aircraft is not based in this state or registered

in this state after the parts or materials are affixed to the

aircraft.

     (3) The tax levied under this act does not apply to the sale

of an aircraft temporarily located in this state for the purpose of

a sale and prepurchase evaluation, customization, improvement,

maintenance, or repair if all of the following conditions are

satisfied:

     (a) The aircraft leaves this state within 15 days after the

sale and the completion of any prepurchase evaluation,

customization, improvement, maintenance, or repair that is

associated with the sale, whichever is later.

     (b) The aircraft was not based in this state or registered in

this state before the sale and any prepurchase evaluation,

customization, improvement, maintenance, or repair that is

associated with the sale is completed and the aircraft is not based

in this state or registered in this state after the sale and any

prepurchase evaluation, customization, improvement, maintenance, or

repair that is associated with the sale is completed.

     (4) A sale of an aircraft to a person for subsequent lease to

a domestic air carrier operating under a certificate issued by the

federal aviation administration under 14 CFR 121, for use solely in

the regularly scheduled transport of passengers is exempt from the

tax under this act.

     (5) As used in this section:

     (a) "Aircraft" means an aerial vehicle that is used in

aviation, other than an unmanned aerial vehicle.

(b) (a) "Based in this state" means hangared or stored in this

state for not less than 10 days in not less than 3 nonconsecutive

months during the immediately preceding 12-month period.

(c) (b) "Customization" means any improvement, maintenance, or

repair that is performed on an aircraft that is associated with the

sale of the aircraft.

(d) (c) "Domestic air carrier" is limited to entities engaged

primarily in the commercial transport for hire of air cargo,

passengers, or a combination of air cargo and passengers as a

business activity.

(e) (d) "Prepurchase evaluation" means an examination of an

aircraft to provide a potential purchaser with information relevant

to the potential purchase.

(f) (e) "Registered in this state" means an aircraft

registered with the state transportation department, bureau of

aeronautics or registered with the federal aviation administration

Federal Aviation Administration to an address located in this

state.

     Enacting section 1. This amendatory act takes effect 90 days

after the date it is enacted into law.