SB-0883, As Passed House, December 18, 2008

HOUSE SUBSTITUTE FOR

SENATE BILL NO. 883

A bill to amend 1933 PA 167, entitled

"General sales tax act,"

by amending section 3 (MCL 205.53), as amended by 2004 PA 173.

THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

Sec. 3. (1) Subject to ~~subsection (4)~~ subsections (4) and (5),

if a person engages or continues in a business for which a

privilege tax is imposed by this act, the person shall, under rules

the department prescribes, apply for and obtain from the department

a license to engage in and to conduct that business for the current

tax year. If the department considers it necessary in order to

secure the collection of the tax or if an applicant taxpayer has at

any time failed, refused, or neglected to pay any tax or interest

or penalty upon a tax or has attempted to evade the payment of any

tax or interest or penalty upon a tax by means of petition in

bankruptcy, or if the applicant taxpayer is a corporation and the

department has reason to believe that the management or control of

the corporation is under persons who have failed to pay any tax or

interest or penalty upon a tax under this act, the department shall

require a surety bond payable to the state of Michigan, upon which

the applicant or taxpayer shall be the obligor, in the sum of not

less than $1,000.00 nor more than $25,000.00. The surety bond shall

be conditioned that the applicant or taxpayer shall comply with

this act and shall promptly file true reports and pay the taxes,

interest, and penalties provided for or required by this act. The

bonds shall be approved as to the amount and surety by the

department. The applicant or taxpayer may in lieu of the surety

bond deposit a sum of money with the department in an amount the

department determines to guarantee the payment of the tax,

interest, and penalty and compliance with this act. However, the

amount determined by the department shall not exceed the estimated

tax payable during a 1-year period. The applicant or taxpayer shall

be licensed to engage in and conduct the business. The department

may require the applicant or taxpayer to furnish any additional

bond that it considers necessary within the limits in this section,

after giving a 30-day notice in writing. The license shall be

renewed annually if the taxpayer pays the tax accrued to this state

under this act. A person shall not engage or continue in a business

taxable under this act without securing a license. A person, firm,

or corporation engaged solely in industrial processing or

agricultural producing under this act and who makes no sales at

retail within the meaning of this act is not required to have a

license.

(2) The state treasurer or his or her designee, after notice

and hearing, may suspend the license of a person who violates or

fails to comply with this act or a rule promulgated by the

department under this act. The state treasurer or his or her

designee may restore licenses after suspension. If a person engages

in business taxable under this act while his or her license is in

suspension, the tax imposed under this act is imposed and payable

with respect to that business.

(3) A person who engages in any business in this state that is

taxable under this act and who fails to secure from the department

a license to engage in that business or who continues to engage in

business after the license has expired or was suspended by the

state treasurer or his or her designee is guilty of a misdemeanor

punishable by a fine of not more than $1,000.00 or imprisonment for

not more than 1 year, or both.

(4) A seller registered under the streamlined sales and use

tax agreement who is not otherwise obligated to obtain a sales tax

license in this state is not required to obtain a sales tax license

because of that registration.

(5) A person who engages in any business in this state that is

taxable under this act shall indicate on the application or renewal

for a license issued under this section if that person is subject

to the tobacco products tax act, 1993 PA 327, MCL 205.421 to

205.436. The state treasurer or his or her designee may deny an

application or renewal and may suspend a license issued under this

section if a person fails to comply with this subsection or if a

Senate Bill No. 883 (H-2) as amended December 18, 2008

person fraudulently indicates that that person is not subject to

the tobacco products tax act, 1993 PA 327, MCL 205.421 to 205.436.

The state treasurer or his or her designee may restore a license

suspended under this subsection if all delinquent taxes, interest,

penalties, and fees due under this act or the tobacco products tax

act, 1993 PA 327, MCL 205.421 to 205.436, are paid in full.

(6) The state treasurer or his or her designee may prohibit

the sale of any products subject to the tax levied under this act

at any location where a person knowingly violated section 8(3) to

(7) and (11) of the tobacco products tax act, 1993 PA 327, MCL

205.428.

(7) [NOTWITHSTANDING SECTION 28(1)(F) OF 1941 PA 122, MCL 205.28,

IF] a person is prohibited from the sale of products

subject to the tax levied under this act under this [SECTION], the

department shall identify the name, address, and location where the

person knowingly violated the tobacco products tax act, 1993 PA

327, MCL 205.421 to 205.436, on the department website.

(8) A person that knowingly violated section 8(3) to (7) and

(11) of the tobacco products tax act, 1993 PA 327, MCL 205.428, [WHICH

VIOLATION RESULTED IN A SEIZURE OF TOBACCO PRODUCTS UNDER SECTION 9 OF THE TOBACCO PRODUCTS LIABILITY ACT, 1993 PA 327, MCL 205.429,] is

subject to the following penalties:

(a) For a first offense, if the amount of the illegal tobacco

products seized is less than [AN AGGREGATE RETAIL VALUE OF] $5,000.00, a

fine of $400.00, or, if

the amount of the illegal tobacco products seized is $5,000.00 or

more [IN AGGREGATE RETAIL VALUE], a fine of not less than $1,000.00 and

suspension of his or

her sales tax license at that location where the violation occurred

for not less than 3 days.

(b) For a second offense, if the amount of the illegal tobacco

products seized is less than [AN AGGREGATE RETAIL VALUE OF] $3,000.00, a

fine of $700.00, or, if

Senate Bill No. 883 (H-2) as amended December 18, 2008

the amount of the illegal tobacco products seized is $3,000.00 or

more [IN AGGREGATE RETAIL VALUE], a fine of not less than $1,000.00 and

suspension of his or

her sales tax license at that location where the violation occurred

for not less than 3 days.

not less than $1,000.00 and suspension of his or her sales tax

license at that location where the violation occurred for not less

than 3 days.

(9) It is an affirmative defense in an action against a

retailer or a person licensed under this section for a violation

committed by an employee of the retailer or licensed person that

the retailer or licensed person had in force at the time of the

violation and continues to have in force a written policy

prohibiting sale of prohibited products by employees and that the

retailer or licensed person enforced and continues to enforce that

policy.