SB-0127, As Passed Senate, May 16, 2012

 

 

 

 

 

 

 

 

 

 

 

SUBSTITUTE FOR

 

SENATE BILL NO. 127

 

 

 

 

 

 

 

 

 

 

 

 

     A bill to amend 1933 PA 167, entitled

 

"General sales tax act,"

 

by amending section 1 (MCL 205.51), as amended by 2008 PA 438.

 

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 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 (vii) and excludes subparagraphs

 

(viii) through (x) (xii):

 

     (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 subject to the tax levied under this act from the seller


 

to the purchaser. A seller is not liable under this act for

 

delivery charges allocated to the delivery of exempt property.

 

     (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 Except as otherwise provided in subparagraphs (xi)

 

and (xii), credit for any trade-in.

 

     (vii) Except as otherwise provided in subparagraph (x),

 

consideration received by the seller from third parties if all of

 

the following conditions are met:

 

     (A) The seller actually receives consideration from a party

 

other than the purchaser and the consideration is directly related

 

to a price reduction or discount on the sale.

 

     (B) The seller has an obligation to pass the price reduction

 

or discount through to the purchaser.

 

     (C) The amount of the consideration attributable to the sale

 

is fixed and determinable by the seller at the time of the sale of

 

the item to the purchaser.

 

     (D) One of the following criteria is met:

 

     (I) The purchaser presents a coupon, certificate, or other

 

documentation to the seller to claim a price reduction or discount

 

where the coupon, certificate, or documentation is authorized,

 

distributed, or granted by a third party with the understanding

 

that the third party will reimburse any seller to whom the coupon,

 

certificate, or documentation is presented.

 

     (II) The purchaser identifies himself or herself to the seller

 

as a member of a group or organization entitled to a price


 

reduction or discount. A preferred customer card that is available

 

to any patron does not constitute membership in a group or

 

organization.

 

     (III) The price reduction or discount is identified as a third

 

party price reduction or discount on the invoice received by the

 

purchaser or on a coupon, certificate, or other documentation

 

presented by the purchaser.

 

     (viii) 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.

 

     (ix) 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.

 

     (x) Beginning January 1, 2000, employee discounts that are

 

reimbursed by a third party on sales of motor vehicles.

 

     (xi) For a retail sale of a titled watercraft that takes place

 

after June 30, 2012, the agreed-upon value of a titled watercraft

 

used as part payment of the purchase price of a new titled

 

watercraft or used titled watercraft if the agreed-upon value is

 

separately stated on the invoice, bill of sale, or similar document

 

given to the purchaser.

 

     (xii) For a retail sale of a motor vehicle that takes place

 

after June 30, 2012, the agreed-upon value of a motor vehicle used

 

as part payment of the purchase price of a new or used motor

 

vehicle if the agreed-upon value is separately stated on the

 

invoice, bill of sale, or similar document given to the purchaser.


 

For purposes of this subparagraph, the agreed-upon value of a motor

 

vehicle used as part payment shall be limited as follows:

 

     (A) After June 30, 2012 through December 31, 2012, $2,500.00.

 

     (B) In 2013, $5,000.00.

 

     (C) In 2014, $7,500.00.

 

     (D) In 2015, $10,000.00.

 

     (E) In 2016, $12,500.00.

 

     (F) In 2017, $15,000.00.

 

     (G) In 2018 and each year after 2018, no limitation on the

 

agreed-upon value of a motor vehicle used as part payment.

 

     (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) "New motor vehicle" means that term as defined in section

 

33a of the Michigan vehicle code, 1949 PA 300, MCL 257.33a.

 

     (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.