September 7, 2007, Introduced by Rep. Tobocman and referred to the Committee on Tax Policy.
A bill to amend 1937 PA 94, entitled
"Use tax act,"
by amending the title and sections 3a and 5 (MCL 205.93a and
205.95), sections 3a and 5 as amended by 2004 PA 172.
THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
TITLE
An act to provide for the levy, assessment, and collection of
a specific excise tax on the storage, use, or consumption in this
state of tangible personal property and certain services; to
appropriate
the proceeds thereof; and of
that tax; to prescribe
penalties; for
violations of the provisions of this act and to make
appropriations.
Sec. 3a. (1) The use or consumption of the following is taxed
under this act in the same manner as tangible personal property is
taxed under this act:
(a) Except as provided in section 3b, intrastate telephone,
telegraph, leased wire, and other similar communications, including
local telephone exchange and long distance telephone service that
both
originates and terminates in Michigan this state, and
telegraph, private line, and teletypewriter service between places
in
Michigan this state, but excluding telephone service by coin-
operated installations, switchboards, concentrator-identifiers,
interoffice circuitry and their accessories for telephone answering
service, and directory advertising proceeds.
(b) Rooms or lodging furnished by hotelkeepers, motel
operators, and other persons furnishing accommodations that are
available to the public on the basis of a commercial and business
enterprise, irrespective of whether or not membership is required
for use of the accommodations, except rooms and lodging rented for
a continuous period of more than 1 month. As used in this act,
"hotel" or "motel" means a building or group of buildings in which
the public may obtain accommodations for a consideration,
including, without limitation, such establishments as inns, motels,
tourist homes, tourist houses or courts, lodging houses, rooming
houses, nudist camps, apartment hotels, resort lodges and cabins,
camps operated by other than nonprofit organizations but not
including those licensed under 1973 PA 116, MCL 722.111 to 722.128,
and any other building or group of buildings in which
accommodations are available to the public, except accommodations
rented for a continuous period of more than 1 month and
accommodations furnished by hospitals or nursing homes.
(c) Except as provided in section 3b, interstate telephone
communications that either originate or terminate in this state and
for
which the charge for the service is billed to a Michigan
service address in this state or phone number by the provider
either within or outside this state including calls between this
state and any place within or without the United States of America
outside
of this state. However, if the tax under this act is levied
at
a rate of 6% This subdivision
does not apply to an 800 prefix
service or similar type service. Before October 1, 2007, this
subdivision does not apply to a wide area telecommunication service
or
a similar type service, an 800 prefix service or similar type
service,
an interstate private network and
related usage charges,
or an international call either inbound or outbound. Beginning
October 1, 2007, a wide area telecommunication service or a similar
type service, an interstate private network and related usage
charges, or an international call either inbound or outbound is
taxed under this act in the same manner as interstate telephone
communications.
(d) The laundering or cleaning of textiles under a sale,
rental, or service agreement with a term of at least 5 days. This
subdivision does not apply to the laundering or cleaning of
textiles used by a restaurant or retail sales business. As used in
this subdivision, "restaurant" means a food service establishment
defined and licensed under the food law of 2000, 2000 PA 92, MCL
289.1101 to 289.8111.
(e) The transmission and distribution of electricity, whether
the electricity is purchased from the delivering utility or from
another provider, if the sale is made to the consumer or user of
the electricity for consumption or use rather than for resale.
(f) For a manufacturer who affixes its product to real estate
and maintains an inventory of its product that is available for
sale to others by publication or price list, the direct production
costs and indirect production costs of the product affixed to the
real estate that are incident to and necessary for production or
manufacturing operations or processes, as defined by the
department.
(g) For a manufacturer who affixes its product to real estate
but does not maintain an inventory of its product available for
sale to others or make its product available for sale to others by
publication or price list, the sum of the materials cost of the
property and the cost of labor to manufacture, fabricate, or
assemble
the property, but does not include the cost of labor to
cut, bend, assemble, or attach the property at the site for
affixation to real estate.
(2) If charges for intrastate telecommunications services or
telecommunications services between this state and another state
and other billed services not subject to the tax under this act are
aggregated with and not separately stated from charges for
telecommunications services that are subject to the tax under this
act, the nontaxable telecommunications services and other
nontaxable billed services are subject to the tax under this act
unless the service provider can reasonably identify charges for
telecommunications services not subject to the tax under this act
from its books and records that are kept in the regular course of
business.
(3) If charges for intrastate telecommunications services or
telecommunications services between this state and another state
and other billed services not subject to the tax under this act are
aggregated with and not separately stated from telecommunications
services that are subject to the tax under this act, a customer may
not rely upon the nontaxability of those telecommunications
services and other billed services unless the customer's service
provider separately states the charges for nontaxable
telecommunications services and other nontaxable billed services
from taxable telecommunications services or the service provider
elects, after receiving a written request from the customer in the
form required by the provider, to provide verifiable data based
upon the service provider's books and records that are kept in the
regular course of business that reasonably identify the nontaxable
services.
(4) There is appropriated to the department of treasury for
the 2006-2007 state fiscal year the sum of $1.00 to implement the
requirements of the amendatory act that added this subsection.
(5) (4)
As used in this section:
(a) "Fabricate" means to modify or prepare tangible personal
property for affixation or assembly.
(b) "Manufacture" means to convert or condition tangible
personal property by changing the form, composition, quality,
combination, or character of the property.
(c) "Manufacturer" means a person who manufactures,
fabricates, or assembles tangible personal property.
Sec. 5. (1) Except as otherwise provided in this subsection or
subsection (5), a person engaged in the business of selling
tangible personal property or services for storage, use, or other
consumption in this state shall register with the department and
give the name and address of each agent operating in this state,
the location of all distribution or sales houses or offices or
other places of business in this state, and any other information
that the department requires relevant to the enforcement of this
act. However, a seller holding a sales tax license obtained under
the general sales tax act, 1933 PA 167, MCL 205.51 to 205.78, is
not required to separately register with the department under this
act. Every seller shall source sales in accordance with section 20
and collect the tax imposed by this act from the consumer.
(2) The corporation, securities, and land development bureau
of
the department of consumer and industry services labor and
economic growth shall not issue to any foreign corporation engaged
in the business of selling tangible personal property a certificate
of authority to do business in this state or approve and file the
proposed articles of incorporation submitted to it by any domestic
corporation authorizing or permitting that corporation to conduct
any business of selling tangible personal property unless the
corporation submits with the application for the certificate of
authority or proposed articles of incorporation an application for
registration of the corporation under this act or an application
for a sales tax license under the general sales tax act, 1933 PA
167, MCL 205.51 to 205.78. The application shall be transmitted to
the department by the corporation, securities, and land development
bureau.
(3) A domestic corporation or a foreign corporation authorized
to transact business in this state that submits a certificate of
dissolution or requests a certificate of withdrawal from this state
shall request a certificate from the department stating that taxes
are not due under section 27a of 1941 PA 122, MCL 205.27a, not more
than 60 days after submitting the certificate of dissolution or
requesting the certificate of withdrawal. A corporation that does
not request a certificate stating that taxes are not due is subject
to the same penalties under section 24 of 1941 PA 122, MCL 205.24,
that a taxpayer would be subject to for failure to file a return.
(4) A lessor may elect to pay use tax on receipts from the
rental or lease of the tangible personal property in lieu of
payment of sales or use tax on the full cost of the property at the
time it is acquired. For tax years that begin after December 31,
2001, in order to make a valid election under this subsection, a
lessor of tangible personal property that is an aircraft shall
obtain a use tax registration by the earlier of the date set for
the first payment of use tax under the lease or rental agreement or
90 days after the lessor first brings the aircraft into this state.
(5) A seller registered under the streamlined sales and use
tax agreement who is not otherwise subject to the tax under this
act is not required to register under this section because of the
registration under the streamlined sales and use tax agreement.
Enacting section 1. This amendatory act takes effect October
1, 2007.