HOUSE BILL No. 5200

 

September 7, 2007, Introduced by Rep. Tobocman and referred to the Committee on Tax Policy.

 

     A bill to amend 1933 PA 167, entitled

 

"General sales tax act,"

 

by amending sections 2 and 6a (MCL 205.52 and 205.56a), section 2

 

as amended by 2004 PA 173 and section 6a as amended by 1993 PA 325.

 

THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

 

     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 or code for telephone use, rather than for

 

resale, including the reauthorization of a prepaid telephone

 

calling card or a prepaid authorization number or code.

 

     (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.

 

     (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 under 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.

 

     Sec. 6a. (1) At the time of purchase or shipment from a

 

refiner, pipeline terminal operator, or marine terminal operator, a

 

purchaser or receiver of gasoline shall prepay a portion of the tax

 


imposed by this act at the rate provided in this section to the

 

refiner, pipeline terminal operator, or marine terminal operator

 

for the purchase or receipt of gasoline. If the purchase or receipt

 

of gasoline is made outside this state for shipment into and

 

subsequent sale within this state, the purchaser or receiver, other

 

than a refiner, pipeline terminal operator, or marine terminal

 

operator, shall make the prepayment required by this section

 

directly to the department. Prepayments shall be made at a cents

 

per gallon rate determined by the department and shall be based on

 

6% of the statewide average retail price of a gallon of self-serve

 

unleaded regular gasoline as determined and certified by the

 

department rounded up to the nearest 1/10 of 1 cent. A person who

 

makes prepayments direct to the department shall make those

 

prepayments according to the schedule in subsection (5).

 

     (2) The rate of prepayment applied pursuant to subsection (1)

 

shall be determined every 6 months by the department unless the

 

department certifies that the change in the statewide average

 

retail price of a gallon of self-serve unleaded regular gasoline

 

has been less than 10% during the 6-month period. However, the rate

 

shall be determined not less than annually.

 

     (3) A person subject to tax under this act who makes

 

prepayment to another person as required by this section may claim

 

an estimated prepayment credit on its regular monthly return filed

 

pursuant to section 6. The credit shall be for prepayments made

 

during the month for which the return is required and shall be

 

based upon the difference between prepayments made in the

 

immediately preceding month and collections of prepaid tax received

 


from sales or transfers. A sale or transfer for which collection of

 

prepaid tax is due the taxpayer is subject to a bad debt deduction

 

under section 4i, whether or not the sale or transfer is a sale at

 

retail. The credit shall not be reduced because of actual

 

shrinkage. A taxpayer who does not, in the ordinary course of

 

business sell gasoline in each month of the year, may, with the

 

approval of the department, base the initial prepayment deduction

 

in each tax year on prepayments made in a month other than the

 

immediately preceding month. Estimated prepayment credits claimed

 

with the return due in January 1984 shall be based on the

 

taxpayer's retail sales of gasoline in December 1983. The

 

difference in actual prepayments shall be reconciled on the annual

 

return in accordance with procedures prescribed by the department.

 

     (4) At the option of the taxpayer the estimated prepayment

 

credit may be claimed on the return required to be filed under Act

 

No. 150 of the Public Acts of 1927, being sections 207.101 to

 

207.202 of the Michigan Compiled Laws the motor fuel tax act, 2000

 

PA 403, MCL 207.1001 to 207.1170, instead of a claim for the credit

 

on the return required to be filed under section 6. Prepayments

 

claimed on the motor fuel tax return shall be based on the

 

difference in the prepayments made in the immediately preceding

 

month and collections of prepaid tax received from sales or

 

transfer and shall be for prepayments made in the month in which

 

the return is due. A taxpayer electing an option under this

 

subsection shall be entitled to a deduction under section 4i as

 

permitted by subsection (3). Amounts credited pursuant to this

 

section shall not be deducted from amounts required to be credited

 


to the Michigan transportation fund pursuant to section 18b of Act

 

No. 150 of the Public Acts of 1927, being section 207.118b of the

 

Michigan Compiled Laws 143 of the motor fuel tax act, 2000 PA 403,

 

MCL 207.1143. The department may establish procedures for the

 

election of claims under subsection (3) and this subsection to

 

avoid duplication of claims.

 

     (5) Notwithstanding the other provisions for the payment and

 

remitting of tax due under this act, a refiner, pipeline terminal

 

operator, or marine terminal operator shall account for and remit

 

to the department the prepayments received pursuant to this section

 

in accordance with the following schedule:

 

     (a) On or before the twenty-fifth of each month, prepayments

 

received after the end of the preceding month and before the

 

sixteenth of the month in which the prepayments are made.

 

     (b) On or before the tenth of each month, payments received

 

after the fifteenth and before the end of the preceding month.

 

     (6) A refiner, pipeline terminal operator, or marine terminal

 

operator who fails to remit prepayments made by a purchaser or

 

receiver of gasoline is subject to the penalties provided by Act

 

No. 122 of the Public Acts of 1941, being sections 205.1 to 205.31

 

of the Michigan Compiled Laws 1941 PA 122, MCL 205.1 to 205.31.

 

     (7) The refiner, pipeline terminal operator, or marine

 

terminal operator shall not receive a deduction under section 4 for

 

receiving and remitting prepayments from a purchaser or receiver

 

pursuant to this section.

 

     (8) The purchaser or receiver of gasoline who makes

 

prepayments is not subject to further liability for the amount of

 


the prepayment if the refiner, pipeline terminal operator, or

 

marine terminal operator fails to remit the prepayment.

 

     (9) As used in this section:

 

     (a) "Marine terminal operator" means a person who stores

 

gasoline at a boat terminal transfer defined as a dock, a tank, or

 

equipment contiguous to a dock or a tank, including equipment used

 

in the unloading of gasoline from a ship and in transferring the

 

gasoline to a tank pending wholesale bulk reshipment.

 

     (b) "Pipeline terminal operator" means a person who stores

 

gasoline in tanks and equipment used in receiving and storing

 

gasoline from interstate and intrastate pipelines pending wholesale

 

bulk reshipment.

 

     (c) "Purchase" or "shipment" does not include an exchange of

 

gasoline, or an exchange transaction, between refiners, pipeline

 

terminal operators, or marine terminal operators.

 

     (d) "Refiner" means a person who manufactures or produces

 

gasoline by any process involving substantially more than the

 

blending of gasoline.