HOUSE SUBSTITUTE FOR

SB-0506, As Passed House, March 12, 2014

SENATE BILL NO. 506

A bill to amend 1998 PA 58, entitled

"Michigan liquor control code of 1998,"

by amending section 409 (MCL 436.1409), as amended by 2000 PA 395.

THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

Sec. 409. (1) Except as provided in this section, the

commission shall levy and collect a tax on all beer manufactured or

sold in this state at the rate of $6.30 per barrel if the beer is

sold in bulk or in different quantities. ~~The~~ Before February 1,

2015, the tax shall be paid by the brewer or brewpub if

manufactured in this state or by the wholesaler or the person from

whom purchased if manufactured outside this state, whichever is

designated by the commission. ~~The commission shall establish by~~

~~rule a method for the collection of the tax levied in this~~

~~subsection. The rules shall be promulgated pursuant to the~~

~~administrative procedures act of 1969, 1969 PA 306, MCL 24.201 to~~

~~24.328.~~

(2) Beginning on and after February 1, 2015, the tax shall be

paid by the brewer or brewpub if the beer is manufactured in this

state or if the beer is manufactured outside this state the tax

shall be paid by the wholesaler assigned to distribute that beer

and the tax shall be levied and collected on the number of barrels

the wholesaler actually sold to licensed retailers in this state. A

brewer may designate a wholesaler to pay the tax on behalf of the

brewer. If a brewer designates a wholesaler to pay the tax on its

behalf, the brewer shall notify the commission of the designation

and provide the commission with a copy of its brewer's report of

operations that it filed with the alcohol and tobacco tax and trade

bureau of the United States department of treasury for each

calendar year.

(3) The commission shall establish by rule a method for the

collection of the tax levied under subsection (1) and reporting

requirements for wholesalers, brewers, brewpubs, and outstate

sellers of beer to verify the remission of taxes to this state. The

commission shall not require that the tax be paid in less than

monthly intervals. The rules shall be promulgated pursuant to the

administrative procedures act of 1969, 1969 PA 306, MCL 24.201 to

24.328.

(4) ~~(2)~~ The tax levied in subsection (1) shall not be

collected ~~with respect to~~ on beer that is consumed on the premises

of the manufacturer or is damaged in the process of brewing,

packaging, ~~and~~ storage, and distribution and is not offered for

sale, except that beer sold by a brewpub for consumption on the

premises or beer produced and consumed on the premises of a micro

brewer is subject to the tax levied under subsection (1).

(5) ~~(3)~~ The tax levied under subsection (1) shall be rebated

to the person ~~who~~ that paid the tax if that person provides

satisfactory proof to the commission that the beer was shipped

outside of this state for sale and consumption outside this state.

(6) ~~(4)~~ For the purposes of the tax levied under subsection

(1), a barrel of beer contains 31 gallons.

(7) ~~(5)~~ The commission may promulgate a rule that designates

the states or the laws or the rules of other states that require a

licensed wholesaler of beer to pay an additional fee for the right

to purchase, import, or sell beer manufactured in this state; that

denies the issuance of a license authorizing the importation of

beer to any ~~licensed~~ wholesaler of beer in that state who ~~may make~~

~~application~~ applies for the license; that prohibits ~~licensed~~

wholesalers of beer in that state from possessing or selling beer

purchased in this state, unless the person from whom the beer was

purchased has secured a license and paid a fee in that state, if

the seller does not transport the beer into the state and does not

sell the beer in the state; or that imposes any higher taxes or

inspection fees upon beer manufactured in this state when

transporting the beer into or selling the beer in that state than

taxes or fees imposed upon beer manufactured and sold within that

state. A rule promulgated under this subsection shall prohibit all

licensees from purchasing, receiving, possessing, or selling any

beer manufactured in any state designated in the rule. A rule

promulgated under this subsection becomes effective as provided in

section 47 of the administrative procedures act of 1969, 1969 PA

306, MCL 24.247. Any licensee or person adversely affected by a

rule promulgated under this subsection is entitled to review by

leave to a court of competent jurisdiction regarding the question

as to whether the commission acted illegally or in excess of its

authority in making its finding under this subsection with respect

to any state.

(8) ~~(6) An~~ Regardless of whether the tax was remitted to this

state by the eligible brewer or a designated wholesaler, an

eligible brewer may claim a credit or request a refund, in a manner

as determined by the commission, against the tax levied under

subsection (1) in the amount of $2.00 per barrel for the first

30,000 barrels. As used in this subsection, "eligible brewer" means

a brewer, whether or not located in this state, or brewpub that

manufactures not more than 50,000 barrels of beer during the tax

year for which the credit is claimed. In determining the number of

barrels for purposes of the credit, all brands and labels of a

brewer shall be combined and all facilities for the production of

beer that are owned or controlled by the same person shall be

treated as a single facility.

Enacting section 1. This amendatory act does not take effect

unless all of the following bills of the 97th Legislature are

enacted into law:

(a) Senate Bill No. 504.

(b) Senate Bill No. 505.