USE TAX: VEHICLE TRANSFER TO IN-LAW H.B. 5261 (S-1):
SUMMARY OF BILL
REPORTED FROM COMMITTEE
House Bill 5261 (Substitute S-1 as reported)
Sponsor: Representative Kevin Cotter
CONTENT
The bill would amend the Use Tax Act to exempt the transfer of a vehicle between in-laws from the use tax.
The Act imposes a tax of 6.0% on the total price of taxable items brought into Michigan or purchased by mail from out-of-State retailers. The tax also is due on vehicles purchased or transferred by an individual or business from someone who is not a licensed dealer or a retailer.
The use tax does not apply, however, to a transaction or portion of a transaction if the transferee or purchaser is the spouse, mother, father, brother, sister, child, stepparent, stepchild, stepsibling, grandparent, grandchild, legal ward, or a legally appointed guardian with a certified letter of guardianship, of the transferor.
Under the bill, the tax also would not apply to a transfer of a vehicle if the transferee or purchaser were the father-in-law, mother-in-law, brother-in-law, sister-in-law, son-in-law, daughter-in-law, or grandparent-in-law of the transferor. This exemption would apply beginning January 1, 2014.
Proposed MCL 205.94bb Legislative Analyst: Suzanne Lowe
FISCAL IMPACT
The bill would reduce General Fund revenue and School Aid Fund revenue by an unknown, and likely negligible amount. Given existing exemptions, taxpayers can effectively achieve the same results as they would under the bill by engaging in an additional transfer.
Date Completed: 6-4-14 Fiscal Analyst: David Zin
This analysis was prepared by nonpartisan Senate staff for use by the Senate in its deliberations and does not constitute an official statement of legislative intent.