December 2, 2008, Introduced by Senators KAHN and BROWN and referred to the Committee on Finance.
A bill to amend 1933 PA 167, entitled
"General sales tax act,"
by amending section 4a (MCL 205.54a), as amended by 2004 PA 173,
and by adding section 4ff.
THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
Sec. 4a. (1) Subject to subsection (2), the following are
exempt from the tax under this act:
(a) A sale of tangible personal property not for resale to a
nonprofit school, nonprofit hospital, or nonprofit home for the
care and maintenance of children or aged persons operated by an
entity of government, a regularly organized church, religious, or
fraternal organization, a veterans' organization, or a corporation
incorporated under the laws of this state, if the income or benefit
from the operation does not inure, in whole or in part, to an
individual or private shareholder, directly or indirectly, and if
the activities of the entity or agency are carried on exclusively
for the benefit of the public at large and are not limited to the
advantage, interests, and benefits of its members or any restricted
group. A sale of tangible personal property to a parent cooperative
preschool is exempt from taxation under this act. As used in this
subdivision, "parent cooperative preschool" means a nonprofit,
nondiscriminatory educational institution, maintained as a
community service and administered by parents of children currently
enrolled in the preschool, that provides an educational and
developmental program for children younger than compulsory school
age, that provides an educational program for parents, including
active participation with children in preschool activities, that is
directed by qualified preschool personnel, and that is licensed by
the department of consumer and industry services pursuant to 1973
PA 116, MCL 722.111 to 722.128.
(b) A sale of tangible personal property not for resale to a
regularly organized church or house of religious worship, except
the following:
(i) Sales in activities that are mainly commercial enterprises.
(ii) Sales of vehicles licensed for use on public highways
other than a passenger van or bus with a manufacturer's rated
seating capacity of 10 or more that is used primarily for the
transportation of persons for religious purposes.
(c) The sale of food to bona fide enrolled students by a
school or other educational institution not operated for profit.
(d) The sale of a vessel designated for commercial use of
registered tonnage of 500 tons or more, if produced upon special
order of the purchaser, and bunker and galley fuel, provisions,
supplies, maintenance, and repairs for the exclusive use of the
vessel engaged in interstate commerce.
(e) A sale of tangible personal property to persons engaged in
a business enterprise and using or consuming the tangible personal
property in the tilling, planting, caring for, or harvesting of the
things of the soil; in the breeding, raising, or caring for
livestock, poultry, or horticultural products, including transfers
of livestock, poultry, or horticultural products for further
growth; or in the direct gathering of fish, by net, line, or
otherwise only by an owner-operator of the business enterprise, not
including a charter fishing business enterprise. This exemption
includes agricultural land tile, which means fired clay or
perforated plastic tubing used as part of a subsurface drainage
system for land, and subsurface irrigation pipe, if the land tile
or irrigation pipe is used in the production of agricultural
products as a business enterprise. This exemption includes a
portable grain bin, which means a structure that is used or is to
be used to shelter grain and that is designed to be disassembled
without significant damage to its component parts. This exemption
also includes grain drying equipment and natural or propane gas
used to fuel that equipment for agricultural purposes. This
exemption does not include transfers of food, fuel, clothing, or
any similar tangible personal property for personal living or human
consumption.
This Except as otherwise
provided in section 4ff, this
exemption does not include tangible personal property permanently
affixed to and becoming a structural part of real estate.
(f) The sale of a copyrighted motion picture film or a
newspaper or periodical admitted under federal postal laws and
regulations effective September 1, 1985 as second-class mail matter
or as a controlled circulation publication or qualified to accept
legal notices for publication in this state, as defined by law, or
any other newspaper or periodical of general circulation,
established not less than 2 years, and published not less than once
a week. Tangible personal property used or consumed in producing a
copyrighted motion picture film, a newspaper published more than 14
times per year, or a periodical published more than 14 times per
year, and not becoming a component part of that film, newspaper, or
periodical is subject to the tax. Tangible personal property used
or consumed in producing a newspaper published 14 times or less per
year or a periodical published 14 times or less per year and that
portion or percentage of tangible personal property used or
consumed in producing an advertising supplement that becomes a
component part of a newspaper or periodical is exempt from the tax
under this subdivision. A claim for a refund for taxes paid before
January 1, 1999, under this subdivision shall be made before June
30, 1999. For purposes of this subdivision, tangible personal
property that becomes a component part of a newspaper or periodical
and consequently not subject to tax includes an advertising
supplement inserted into and circulated with a newspaper or
periodical that is otherwise exempt from tax under this
subdivision, if the advertising supplement is delivered directly to
the newspaper or periodical by a person other than the advertiser,
or the advertising supplement is printed by the newspaper or
periodical.
(g) A sale of tangible personal property to persons licensed
to operate commercial radio or television stations if the property
is used in the origination or integration of the various sources of
program material for commercial radio or television transmission.
This subdivision does not include a vehicle licensed and titled for
use on public highways or property used in the transmission to or
receiving from an artificial satellite.
(h) The sale of a prosthetic device, durable medical
equipment, or mobility enhancing equipment.
(i) The sale of a vehicle not for resale to a Michigan
nonprofit corporation organized exclusively to provide a community
with ambulance or fire department services.
(j) A sale of tangible personal property to inmates in a penal
or correctional institution purchased with scrip or its equivalent
issued and redeemed by the institution.
(k) A sale of textbooks sold by a public or nonpublic school
to or for the use of students enrolled in any part of a
kindergarten through twelfth grade program.
(l) A sale of tangible personal property installed as a
component part of a water pollution control facility for which a
tax exemption certificate is issued pursuant to part 37 of the
natural resources and environmental protection act, 1994 PA 451,
MCL 324.3701 to 324.3708, or an air pollution control facility for
which a tax exemption certificate is issued pursuant to part 59 of
the natural resources and environmental protection act, 1994 PA
451, MCL 324.5901 to 324.5908.
(m) The sale or lease of the following to an industrial
laundry after December 31, 1997:
(i) Textiles and disposable products including, but not limited
to, soap, paper, chemicals, tissues, deodorizers and dispensers,
and all related items such as packaging, supplies, hangers, name
tags, and identification tags.
(ii) Equipment, whether owned or leased, used to repair and
dispense textiles including, but not limited to, roll towel
cabinets, slings, hardware, lockers, mop handles and frames, and
carts.
(iii) Machinery, equipment, parts, lubricants, and repair
services used to clean, process, and package textiles and related
items, whether owned or leased.
(iv) Utilities such as electric, gas, water, or oil.
(v) Production washroom equipment and mending and packaging
supplies and equipment.
(vi) Material handling equipment including, but not limited to,
conveyors, racks, and elevators and related control equipment.
(vii) Wastewater pretreatment equipment and supplies and
related maintenance and repair services.
(n) A sale of tangible personal property to a person holding a
direct payment permit under section 8 of the use tax act, 1937 PA
94, MCL 205.98.
(2) The tangible personal property under subsection (1) is
exempt only to the extent that that property is used for the exempt
purpose if one is stated in subsection (1). The exemption is
limited to the percentage of exempt use to total use determined by
a reasonable formula or method approved by the department.
Sec. 4ff. (1) Beginning on the effective date of the
amendatory act that added this section through December 31, 2012, a
person subject to the tax under this act may exclude from the gross
proceeds used for computation of the tax the sale of tangible
personal property used to implement or comply with a wildlife risk
mitigation action plan for a beef or dairy farm that is located in
a modified accredited zone if that beef or dairy farm had a
premises identification number registered with the department of
agriculture for bovine tuberculosis testing prior to September 1,
2008. The exemption under this section includes tangible personal
property permanently affixed to and becoming a structural part of
real estate.
(2) As used in this section:
(a) "Modified accredited zone" means those areas identified in
this state under 9 CFR 77.11, as modified accredited zones.
(b) "Project" means certain risk mitigating measures, which
may include, but are not limited to, the following:
(i) Making it difficult for wildlife to access feed by storing
livestock feed securely, restricting wildlife access to feeding and
watering areas, and deterring or reducing wildlife presence around
cattle and cattle feed by storing feed in an enclosed barn,
wrapping bales or covering stacks with tarps, closing ends of bags,
storing grains in animal proof containers or bins, maintaining
fences, practicing small mammal and rodent control, or feeding away
from deer cover.
(ii) Minimizing wildlife access to cattle feed and water by
feeding cattle in an enclosed area, feeding in open areas near
buildings and human activity, removing extra or waste feed when
cattle are moved, using hay feeders to reduce waste, using
artificial water systems to help keep cattle from sharing water
sources with wildlife, fencing off stagnant ponds and wetlands, and
keeping mineral feeders near buildings and human activity or using
devices that restrict deer usage.
(c) "Wildlife risk mitigation action plan" means a written
plan consisting of 1 or more projects to help reduce the risks of
bovine tuberculosis spreading between wildlife and livestock and is
approved by the department of agriculture under the animal industry
act, 1988 PA 466, MCL 287.701 to 287.745.