HOUSE BILL No. 4203

 

February 6, 2013, Introduced by Reps. VerHeulen, Schor, Heise, Ananich, Cavanagh, Pettalia, Rogers, Schmidt, Lori, Crawford, Lipton, Rendon, Daley, Switalski, Foster, Kowall and Oakes and referred to the Committee on Tax Policy.

 

     A bill to amend 1937 PA 94, entitled

 

"Use tax act,"

 

(MCL 205.91 to 205.111) by adding section 5a.

 

THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

 

     Sec. 5a. (1) A person who sells tangible personal property

 

shall register with the department and collect the tax levied under

 

this act, and is personally liable for the tax levied under this

 

act as provided in section 9, if an affiliated person, other than a

 

common carrier acting as a common carrier, has a physical location

 

in this state, conducts business activity in this state, or is

 

otherwise subject to the tax under this act or the general sales

 

tax act, 1933 PA 167, MCL 205.51 to 205.78, and that affiliated

 

person, directly or indirectly, does any of the following:

 

     (a) Sells a similar line of products as the seller and does so

 

under the same business name as the seller or a similar business

 


name.

 

     (b) Uses its employees in this state or facilities in this

 

state to advertise and promote or facilitate sales by the seller to

 

customers in this state for storage, use, or consumption in this

 

state.

 

     (c) Maintains an office, distribution facility, warehouse,

 

storage place, or similar place of business in this state to

 

facilitate the delivery of tangible personal property sold by the

 

seller to the seller's customers in this state for storage, use, or

 

consumption in this state.

 

     (d) Uses trademarks, service marks, or trade names in this

 

state that are the same or substantially similar to those used by

 

the seller.

 

     (e) Delivers, installs, assembles, or performs maintenance or

 

repair services for the seller's customers in this state.

 

     (f) Facilitates the sale of tangible personal property to

 

customers in this state by allowing the seller's customers in this

 

state to pick up or return tangible personal property sold by the

 

seller at an office, distribution facility, warehouse, storage

 

place, or similar place of business maintained by that affiliated

 

person in this state.

 

     (g) Conducts any other activities in this state that are

 

significantly associated with the seller's ability to establish and

 

maintain a market in this state for the seller's sales of tangible

 

personal property to customers in this state for storage, use, or

 

consumption in this state.

 

     (2) If a seller of tangible personal property does not have an

 


affiliated person in this state, that seller shall register with

 

the department and collect the tax levied under this act, and is

 

personally liable for the tax levied under this act as provided in

 

section 9, if the seller enters into an agreement with 1 or more

 

residents of this state under which the resident, for a commission

 

or other consideration, directly or indirectly, refers potential

 

customers, whether by a link on an internet website, in-person oral

 

presentation, or otherwise, to the seller, if the cumulative gross

 

receipts from sales by the seller for storage, use, or consumption

 

in this state to customers in this state who are referred to the

 

seller by all residents of this state with such an agreement with

 

the seller is greater than $10,000.00 during the immediately

 

preceding 12 months.

 

     (3) The presumptions under subsections (1) and (2) may be

 

rebutted by demonstrating that the affiliated person, or the

 

residents of this state with whom the seller has an agreement, did

 

not engage in any solicitation or any other activity within this

 

state that was significantly associated with the seller's ability

 

to establish or maintain a market in this state for the seller's

 

sales of tangible personal property or services to customers in

 

this state for storage, use, or consumption in this state. Evidence

 

to rebut the presumptions may consist of written statements from

 

all affiliated persons and residents with whom the seller has an

 

agreement stating that they did not engage in any such solicitation

 

or other activities in this state on behalf of the seller during

 

the preceding year if the statements are provided and obtained in

 

good faith.

 


     (4) As used in this section:

 

     (a) "Affiliated person" means either of the following:

 

     (i) Any person that is a part of the same controlled group of

 

corporations as the seller.

 

     (ii) Any other person or entity that, notwithstanding its form

 

of organization, bears the same ownership relationship to the

 

seller as a corporation that is a member of the same controlled

 

group of corporations.

 

     (b) "Controlled group of corporations" means that term as

 

defined in section 1563(a) of the internal revenue code, 26 USC

 

1563.

 

     Enacting section 1. This amendatory act takes effect 30 days

 

after the date this amendatory act is enacted into law.