SENATE BILL No. 584

July 10, 2001, Introduced by Senator GARCIA and referred to the Committee on Economic Development, International Trade and Regulatory Affairs.

A bill to amend 1937 PA 94, entitled

"Use tax act,"

by amending sections 3 and 4g (MCL 205.93 and 205.94g), section 3

as amended by 1999 PA 117 and section 4g as added by 1985 PA 66.

THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

1 Sec. 3. (1) There is levied upon and there shall be col-

2 lected from every person in this state a specific tax for the

3 privilege of using, storing, or consuming tangible personal prop-

4 erty in this state at a rate equal to 6% of the price of the

5 property or services specified in section 3a. Penalties and

6 interest shall be added to the tax if applicable as provided in

7 this act. For the purpose of the proper administration of this

8 act and to prevent the evasion of the tax, it is presumed that

9 tangible personal property purchased is subject to the tax if

10 brought into the state within 90 days of the purchase date and is

00205'01 b LTB

2

1 considered as acquired for storage, use, or other consumption in

2 this state.

3 (2) The tax imposed by this section for the privilege of

4 using, storing, or consuming a vehicle, ORV, mobile

5 MANUFACTURED home, aircraft, snowmobile, or watercraft shall be

6 collected before the transfer of the vehicle, ORV, mobile

7 MANUFACTURED home, aircraft, snowmobile, or watercraft, except a

8 transfer to a licensed dealer or retailer for purposes of resale

9 that arises by reason of a transaction made by a person who does

10 not transfer vehicles, ORVs, mobile MANUFACTURED homes, air-

11 craft, snowmobiles, or watercraft in the ordinary course of his

12 or her business done in this state. The tax on a vehicle, ORV,

13 snowmobile, and watercraft shall be collected by the secretary of

14 state before the transfer of the vehicle, ORV, snowmobile, or

15 watercraft registration. The tax on a mobile MANUFACTURED home

16 shall be collected by the department of consumer and industry

17 services, mobile home MANUFACTURED HOUSING commission, or its

18 agent before the transfer of the certificate of title. The tax

19 on an aircraft shall be collected by the department of treasury.

20 Notwithstanding any limitation contained in section 2, the price

21 tax base of any vehicle, ORV, mobile MANUFACTURED home, air-

22 craft, snowmobile, or watercraft subject to taxation under this

23 act shall be not less than its retail dollar value at the time of

24 acquisition as fixed pursuant to rules promulgated by the

25 department.

26 (3) The following transfers or purchases are not subject to

27 use tax:

00205'01 b

3

1 (a) A transaction or a portion of a transaction if the

2 transferee or purchaser is the TRANSFEROR'S spouse, mother,

3 father, brother, sister, child, stepparent, stepchild, stepbroth-

4 er, stepsister, grandparent, grandchild, legal ward, or a

5 legally appointed guardian with a certified letter of

6 guardianship. , of the transferor.

7 (b) A transaction or a portion of a transaction if the

8 transfer is a gift to a beneficiary in the administration of an

9 estate.

10 (c) If a vehicle, ORV, mobile MANUFACTURED home, aircraft,

11 snowmobile, or watercraft that has once been subjected to the

12 Michigan sales or use tax is transferred in connection with the

13 organization, reorganization, dissolution, or partial liquidation

14 of an incorporated or unincorporated business and the beneficial

15 ownership is not changed.

16 (d) If an insurance company licensed to conduct business in

17 this state acquires ownership of a late model distressed vehicle

18 as defined in section 12a of the Michigan vehicle code, 1949 PA

19 300, MCL 257.12a, through payment of damages in response to a

20 claim or when the person who owned the vehicle before the insur-

21 ance company reacquires ownership from the company as part of the

22 settlement of a claim.

23 (4) The department may utilize the services, information, or

24 records of any other department or agency of state government in

25 the performance of its duties under this act, and other depart-

26 ments or agencies of state government are required to furnish

00205'01 b

4

1 those services, information, or records upon the request of the

2 department.

3 Sec. 4g. (1) The tax levied shall DOES not apply to prop-

4 erty purchased from a seller or transferor if the property is

5 part of the purchase or transfer of a business.

6 (2) The exemption provided by this section shall DOES not

7 apply to all of the following:

8 (a) The purchase or transfer of tangible personal property

9 that is stock-in-trade or other property of a kind which THAT

10 would properly be included in the inventory of the seller or

11 transferor if on hand at the close of the seller's or

12 transferor's tax period or property held by the seller or trans-

13 feror for sale to customers in the ordinary course of its trade

14 or business.

15 (b) The purchase or transfer of a motor vehicle, ORV,

16 mobile MANUFACTURED home, aircraft, snowmobile, or watercraft.

17 (3) As used in this section, "purchase or transfer of a

18 business" means 1 or more of the following:

19 (a) The purchaser or transferee has acquired and intends to

20 use the seller's or transferor's trade name or good will.

21 (b) The purchaser or transferee intends to continue all or

22 part of the business of the seller or transferor at the same

23 location or at another location.

24 (c) The purchaser or transferee acquired at least 75% of the

25 seller's or transferor's tangible personal property at 1 or more

26 of the seller's or transferor's business locations.

00205'01 b

5

1 Enacting section 1. This amendatory act does not take

2 effect unless Senate Bill No. _____ or House Bill No. _____

3 (request no. 00205'01) of the 91st Legislature is enacted into

4 law.

00205'01 b Final page. LTB