October 24, 2017, Introduced by Reps. Alexander and Kahle 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 2016 PA 431.
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
(i) Sales in activities that are mainly commercial
(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, draining, 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. 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 the
fuel or energy source that powers that equipment for agricultural
purposes. This exemption also includes tangible personal property
affixed to or to be affixed to and directly used in the operation
of either a portable grain bin or grain drying equipment. This
exemption includes a sale of agricultural land tile, subsurface
irrigation pipe, portable grain bins, and grain drying equipment to
a person in the business of constructing, altering, repairing, or
improving real estate for others to the extent that it is affixed
to or made a structural part of real estate and is used for a
purpose exempt under this subsection. This exemption does not
include transfers of food, fuel, clothing, or any similar tangible
personal property for personal living or human consumption. Except
for agricultural land tile, subsurface irrigation pipe, portable
grain bins, and grain drying equipment, this exemption does not
include tangible personal property permanently affixed and becoming
a structural part of real estate. As used in this subdivision,
"biomass" means crop residue used to produce energy or agricultural
crops grown specifically for the production of energy.
(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. 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) Before October 1, 2012, 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
(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
(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.
(o) The sale of a dental prosthesis.
(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.
Enacting section 1. This amendatory act is retroactive and
effective beginning July 1, 2017.