April 5, 2007, Introduced by Rep. Condino and referred to the Committee on Tax Policy.
A bill to amend 1933 PA 167, entitled
"General sales tax act,"
by amending sections 1 and 2 (MCL 205.51 and 205.52), as amended by
2004 PA 173.
THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
Sec. 1. (1) As used in this act:
(a) "Person" means an individual, firm, partnership, joint
venture, association, social club, fraternal organization,
municipal or private corporation whether organized for profit or
not, company, estate, trust, receiver, trustee, syndicate, the
United States, this state, county, or any other group or
combination acting as a unit, and includes the plural as well as
the singular number, unless the intention to give a more limited
meaning is disclosed by the context.
(b) "Sale at retail" or "retail sale" means a sale, lease, or
rental of tangible personal property or services for any purpose
other than for resale, sublease, or subrent.
(c) "Gross proceeds" means sales price.
(d) "Sales price" means the total amount of consideration,
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 sales tax. Sales price includes the
following subparagraphs (i) through (vi) and excludes subparagraphs
(vii) through (viii):
(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 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 for any trade-in.
(vii) 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.
(viii) 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.
(e) "Business" includes an activity engaged in by a person or
caused to be engaged in by that person with the object of gain,
benefit, or advantage, either direct or indirect.
(f) "Tax year" or "taxable year" means the fiscal year of the
state or the taxpayer's fiscal year if permission is obtained by
the taxpayer from the department to use the taxpayer's fiscal year
as the tax period instead.
(g) "Department" means the department of treasury.
(h) "Taxpayer" means a person subject to a tax under this act.
(i) "Tax" includes a tax, interest, or penalty levied under
this act.
(j) "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, pillow cases, 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.
(k) "Direct broadcast satellite service" means the
distribution or broadcasting of video programming or services by
satellite directly to the consumer's receiving equipment without
the use of ground receiving or distribution equipment, except the
consumer's receiving equipment or equipment used in the uplink
process to the satellite, and includes all service and rental
charges, premium channels or other special services, installation
and repair service charges, and any other charges having any
connection with the provision of the satellite broadcasting
service.
(2) If the department determines that it is necessary for the
efficient administration of this act to regard an unlicensed
person, including a salesperson, representative, peddler, or
canvasser as the agent of the dealer, distributor, supervisor, or
employer under whom the unlicensed person operates or from whom the
unlicensed person obtains the tangible personal property sold by
the unlicensed person, irrespective of whether the unlicensed
person is making sales on the unlicensed person's own behalf or on
behalf of the dealer, distributor, supervisor, or employer, the
department may so regard the unlicensed person and may regard the
dealer, distributor, supervisor, or employer as making sales at
retail at the retail price for the purposes of this act.
Sec. 2. (1) Except as provided in section 2a, there is levied
upon and there shall be collected from all persons engaged in the
business of making sales at retail, by which ownership of tangible
personal property is transferred for consideration, an annual tax
for the privilege of engaging in that business equal to 6% of the
gross proceeds of the business, plus the penalty and interest if
applicable as provided by law, less deductions allowed by this act.
(2) The tax under subsection (1) also applies to the
following:
(a) The transmission and distribution of electricity, whether
the electricity is purchased from the delivering utility or from
another provider, if the sale is made to the consumer or user of
the electricity for consumption or use rather than for resale.
(b) The sale of a prepaid telephone calling card or a prepaid
authorization number for telephone use, rather than for resale,
including the reauthorization of a prepaid telephone calling card
or a prepaid authorization number.
(c) A conditional sale, installment lease sale, or other
transfer of property, if title is retained as security for the
purchase but is intended to be transferred later.
(d) The sale of direct broadcast satellite service if the sale
is made to the consumer or user of the direct broadcast satellite
service for consumption or use rather than for resale.
(3) Any person engaged in the business of making sales at
retail who is at the same time engaged in some other kind of
business, occupation, or profession not taxable under this act
shall keep books to show separately the transactions used in
determining the tax levied by this act. If the person fails to keep
separate books, there shall be levied upon him or her the tax
provided for in subsection (1) equal to 6% of the entire gross
proceeds of both or all of his or her businesses. The taxes levied
by this section are a personal obligation of the taxpayer.
(4) A meal provided free of charge or at a reduced rate to an
employee during work hours by a food service establishment licensed
by the Michigan department of agriculture for the convenience of
the employer is not considered transferred for consideration.