HOUSE BILL No. 5704


     March 18, 1998, Introduced by Rep. Profit and referred to the Committee on Tax Policy.


        A bill to amend 1893 PA 206, entitled

   "The general property tax act,"

   by amending section 8a (MCL 211.8a), as added by 1994 PA 96.

               THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

 1         Sec. 8a.  (1) Qualified personal property made available by

 2    a person that is a qualified business for use by another person

 3    shall not be assessed to the qualified business and instead is

 4    assessable and taxable to the user who acquires or possesses the

 5    qualified personal property to the extent provided for in this

 6    section.  Property assessed under this section shall not be

 7    required to be assessed separately from other personal property

 8    assessed to the user.

 9         (2)  A person who is a qualified business that makes

10     available qualified personal property shall file the statement

11     required by section 18 not later than February 1.  A person to


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 1    whom QUALIFIED PERSONAL property is taxable as provided in this

 2    section shall file the statement required by section 18 by

 3    February 20 AND SHALL INCLUDE THE QUALIFIED PERSONAL PROPERTY ON

 4    THAT STATEMENT.  The statement filed by the qualified business

 5     shall include, separately for each user, all of the following for

 6     all qualified personal property:

 7          (a) The name of the qualified business.

 8          (b) The user responsible for payment of the tax.

 9          (c) The type of property.

10          (d) The location of the property, as indicated in the

11     records of the qualified business.

12          (e) The purchase price including sales tax, freight, and

13     installation.

14          (f) The year the property was purchased.

15          (g) If the qualified business is the manufacturer of the

16     property, the original selling price, and if there is no original

17     selling price, then the original cost.

18          (h) The amount and frequency of periodic payments required

19     of the user.

20          (i) An affirmation that the person making the statement is a

21     qualified business and that property included in the statement is

22     qualified personal property as defined in this section.

23          (3) A person who makes available qualified personal property

24     that files the statement provided for in subsection (2) shall

25     provide a copy of the statement to each user of property respon-

26     sible for payment of the tax along with a notice that the user is

27     responsible for reporting the property and the payment of the



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 1    tax.  A user of qualified personal property may request from the

 2     assessor, and the assessor shall provide, a copy of that portion

 3     of the statement filed by the qualified business by February 1

 4     that includes qualified personal property for that user.  If the

 5     statement is not filed by February 1, or if property is not

 6     included in the statement required to be filed by February 1,

 7     then property is assessable and taxable to the person who makes

 8     the property available regardless of whether the person is a

 9     qualified business or the property is qualified personal

10     property. 

11         (3)  (4)  A designee of the local tax collecting unit who is

12    a certified assessor may examine the books and records of a

13    person who files the statement required by  subsection (2) 

14    SECTION 18 that are necessary to determine if  the person is a

15     qualified business and if  property included in the statement

16    required by  subsection (2)  SECTION 18 is qualified personal

17    property.  A person is not required to be a certified personal

18    property examiner to examine books and records pursuant to this

19    subsection.

20         (4)  (5)  The state tax commission shall develop additions

21    to the statement required by section 18 necessary to assure that

22    property reported pursuant to subsection (2) is certified under

23    oath to be qualified personal property reported by a  qualified

24     business  PERSON TO WHOM QUALIFIED PERSONAL PROPERTY IS TAXABLE.

25         (5)  (6)  As used in this section:







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 1         (a) "Employee" means a person who performs a service for

 2    wages or other remuneration under a contract of hire, written or

 3    oral, express or implied.

 4         (b) "Qualified business" means a for-profit business that

 5    obtains services relating to that business from 30 or fewer

 6    employees or employees of independent contractors performing

 7    services substantially similar to employees during a random week

 8    in the year ending on the tax day.  If a person is an entity

 9    under common control or is a member of an affiliated group as

10    those terms are used in section 36(7) of the single business tax

11    act,  Act No. 228 of the Public Acts of 1975, being section

12     208.36 of the Michigan Compiled Laws  1975 PA 228, MCL 208.36,

13    the number of employees from whom services are obtained includes

14    all employees of the group and employees of independent contrac-

15    tors of the group rendering services to the qualified business.

16         (c) "Qualified personal property" means property on which a

17    retail sales tax has been paid or liability accrued contemporane-

18    ous with the user acquiring possession of the property, or on

19    which sales tax would be payable if the property was not exempt,

20    and that is subject to an agreement entered into after December

21    31, 1993 to which all of the following apply:

22         (i) A party engaged in a for-profit business obtains the

23    right to use or possess personal property in exchange for making

24    periodic payments for a noncancelable term of 12 months or more.

25         (ii) The party making periodic payments can obtain legal

26    title to the property by making all the periodic payments or all

27    of the periodic payments and a final payment that is less than



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 1    the true cash value of the property determined using state tax

 2    commission cost multipliers for personal property.

 3         (iii) The written agreement between the qualified business

 4    and the party making periodic payments requires that party to

 5    report the property pursuant to section 18 and to pay taxes

 6    assessed against the property.

 7         (d) "Random week" means a 7-day period during a calendar

 8    year beginning on a Monday and ending on a Sunday that is

 9    selected at random.  Not later than January 15 each year, the

10    state tax commission shall establish the random week for the

11    immediately preceding year.

12         (6)  (7)  This section does not affect the requirements for

13    reporting or assessing personal property acquired or possessed by

14    a nonprofit organization.

15         (7)  (8)  This section applies to personal property assess-

16    ments made after 1994 and before 2000.

























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