Senate Introduced Bill 1054
























SENATE BILL NO. 1054


   April 15, 1998, Introduced by Senators BULLARD and EMMONS and
        referred to the Committee on Finance.



        A bill to amend 1893 PA 206, entitled

   "The general property tax act,"

   by amending sections 8a and 13 (MCL 211.8a and 211.13),

   section 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
             BY THE LOCAL

 4    TAX COLLECTING UNIT IN WHICH THE QUALIFIED BUSINESS IS LOCATED

 5    and  instead  is NOT assessable BY THE LOCAL TAX
             COLLECTING UNIT

 6    IN WHICH THE QUALIFIED PERSONAL PROPERTY IS LOCATED and IS NOT

 7    taxable to the user who acquires or possesses the qualified per-

 8    sonal property.  to the extent provided for in this section.

 9     Property assessed under this section shall not be required
                       to be




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 1    assessed separately from other personal property assessed to
             the

 2     user. 

 3         (2) A person who is a qualified business that makes avail-

 4    able qualified personal property shall file the statement

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

 6     whom property is taxable as provided in this section shall
                       file

 7     the statement required by section 18 by February 20.
                        The state-

 8    ment filed by the qualified business shall include  ,
             separately

 9     for each user,  all of the following for all
                       qualified personal

10    property:

11         (a) The name of the qualified business.

12         (b) The user  responsible for payment of the tax
              IN POSSES-

13    SION OF THE QUALIFIED PERSONAL PROPERTY.

14         (c) The type of property.

15         (d) The location of the QUALIFIED PERSONAL property, as

16    indicated in the records of the qualified business.

17         (e) The purchase price OF THE QUALIFIED PERSONAL PROPERTY,

18    including sales tax, freight, and installation.

19         (f) The year the QUALIFIED PERSONAL property was purchased.

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

21    QUALIFIED PERSONAL property, the original selling price, and if

22    there is no original selling price, then the original cost.

23         (h) The amount and frequency of periodic payments FOR THE

24    QUALIFIED PERSONAL PROPERTY required of the user.

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

26    qualified business and that property included in the statement is

27    qualified personal property as defined in this section.



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                                   3

 1         (3) A  person who  QUALIFIED BUSINESS THAT
             makes available

 2    qualified personal property AND that files the statement provided

 3    for in subsection (2) shall provide a copy of the statement to

 4    each user of THE QUALIFIED PERSONAL property  responsible
             for

 5     payment of the tax  along with a notice that the
                        user  QUALIFIED

 6    BUSINESS is responsible for reporting the property and the pay-

 7    ment of the tax.  A user of qualified personal property may

 8    request from the assessor OF THE LOCAL TAX COLLECTING UNIT IN

 9    WHICH THE QUALIFIED BUSINESS IS LOCATED, and the assessor shall

10    provide, a copy of that portion of the statement filed by the

11    qualified business  by February 1  that includes
             qualified per-

12    sonal property  for  IN THE POSSESSION OF that
             user.  If the

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

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

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

16     the property available regardless of whether the person is a

17     qualified business or the property is qualified personal

18     property. 

19         (4) A designee of the local tax collecting unit who is a

20    certified assessor may examine the books and records of a 
             person

21     who  QUALIFIED BUSINESS THAT files the statement
                       required by sub-

22    section (2) that are necessary to determine if the person is a

23    qualified business and if property included in the statement

24    required by subsection (2) is qualified personal property.  A

25    person is not required to be a certified personal property

26    examiner to examine books and records  pursuant to 
             UNDER this

27    subsection.



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                                   4

 1         (5) The state tax commission shall develop additions to the

 2    statement required by section 18 necessary to assure that prop-

 3    erty reported pursuant to subsection (2) is certified under oath

 4    to be qualified personal property reported by a qualified

 5    business.

 6         (6) As used in this section:

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

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

 9     oral, express or implied. 

10         (A)  (b)  "Qualified business" means a for-profit business

11    that  obtains services relating to that business from 30 or
             fewer

12     employees or employees of independent contractors performing

13     services substantially similar to employees during a random
                       week

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

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

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

17     act, Act No. 228 of the Public Acts of 1975, being section
                       208.36

18     of the Michigan Compiled Laws, the number of employees from
                       whom

19     services are obtained includes all employees of the group
                       and

20     employees of independent contractors of the group rendering
                       serv-

21     ices to the qualified business.  GRANTS THE RIGHT
                       TO USE OR POS-

22    SESS PERSONAL PROPERTY IN EXCHANGE FOR PERIODIC PAYMENTS.

23         (B)  (c)  "Qualified personal property" means
             property  on

24     which  THAT a  retail sales tax has been
                       paid or liability

25     accrued contemporaneous with the user acquiring possession
                       of the

26     property, or on which sales tax would be payable if the
                       property

27     was not exempt, and that is subject to an agreement entered
                       into



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                                   5

 1    after December 31, 1993 to which all of the following apply: 
             (i)

 2     A party engaged in a for-profit business  PERSON
                       obtains the

 3    right to use or possess  personal property  in
             exchange for

 4    making periodic payments.  for a noncancelable term of 12
             months

 5     or more.

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

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

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

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

10     commission cost multipliers for personal property.

11          (iii) The written agreement between the
                       qualified business

12     and the party making periodic payments requires that party
                       to

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

14     assessed against the property.

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

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

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

18     state tax commission shall establish the random week for the

19     immediately preceding year.

20          (7) This section does not affect the requirements for

21     reporting or assessing personal property acquired or
                       possessed by

22     a nonprofit organization.

23          (8) This section applies to personal property
                       assessments

24     made after 1994 and before 2000. 

25         Sec.  13.  (1) All tangible personal property, except as

26    provided in  section  SECTIONS 8A AND 14, shall be
             assessed to

27    the owner  thereof  OF THAT TANGIBLE PERSONAL
             PROPERTY, if known,



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                                   6

 1    in the  township  LOCAL TAX COLLECTING UNIT in
             which  it  THE

 2    TANGIBLE PERSONAL PROPERTY is located on  the  tax
             day AS PRO-

 3    VIDED IN SECTION 2.  If the owner is not known and  there is
              a

 4    person  , firm or corporation  IS beneficially
             entitled to  any 

 5    tangible personal property or  having charge or 
             HAS possession

 6     thereof, then to such  OF TANGIBLE PERSONAL
             PROPERTY, THE TANGI-

 7    BLE PERSONAL PROPERTY SHALL BE ASSESSED TO THAT person.  ,
             firm

 8     or corporation:  Provided, That one having 

 9         (2) A PERSON WITH a security interest IN TANGIBLE PERSONAL

10    PROPERTY without possession  may  SHALL not be
             assessed as an

11    owner of THAT tangible personal property.  :  Provided, That

12     when 

13         (3) IF tangible personal property is assessed to a person
              ,

14     firm or corporation  in  charge or
                        possession of  such  THAT

15    TANGIBLE PERSONAL property,  such  THAT person,
              firm or corpora-

16     tion shall,  unless contrary to a contractual
                       provision,  have 

17    HAS a right of action for the amount of  such  THE
             taxes ASSESSED

18    against the owner or person beneficially entitled to  such
              THAT

19    TANGIBLE PERSONAL property.

20          Inventories of goods, wares, materials, merchandise
             and

21     supplies such as are commonly used in trade or commerce or
                       manu-

22     facture shall, upon the filing by the owner thereof of a
                       sworn

23     statement with the assessing officer showing the total of
                       such

24     inventories for each of the preceding 12 months ending
                       December

25     31, be assessed on the basis of the average monthly
                       inventory for

26     such 12-month period.  The average monthly inventory shall
                       be

27     computed on the basis of the number of months during which
                       said



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                                   7

 1    inventories of goods, wares, merchandise and supplies had a

 2     taxable situs in the assessing district.  No 

 3         (4) AN assessing officer  shall be  IS NOT
             restricted to any

 4    particular period in  the preparation of  PREPARING
             the assess-

 5    ment roll  but  AND may survey, examine, or review
              properties 

 6    PROPERTY at any time prior to or after  said  THE
             tax day AS PRO-

 7    VIDED IN SECTION 2.










































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