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  Changes in Michigan Tax Laws, 1997 Through August 2005
   
Sales-Related Taxes

Sales Tax
1997 PA 193: Specifies that sale at retail includes sale of prepaid telephone calling cards or a prepaid authorization number.
1998 PA 60: Specifies that the provision governing the application of the sales tax to food sold from a mobile facility or vending machine, applies after December 31, 1994. A refund may not be made for any taxes paid after that date and before January 16, 1997, for food or drink otherwise exempt under this provision.
  PA 257: Repeals a provision that exempted from the sales tax sales made under contracts that were entered into, or bid and accepted, before January 1, 1970.
  PA 265: Alters the provisions that required the prepayment of sales taxes by certain retailers. Prepayment is no longer required; rather, taxes are to be paid on the 15th and the last day of the month collected.
  PA 267: Reduces the amount that a taxpayer, who is subject to the act's accelerated payment provisions, must prepay; alters the dates when payments are due; removes the cap on the collection allowance; and reduces the collection allowance.
  PA 274: Exempts the purchase of tangible personal property purchased by a person engaged in the business of constructing, altering, repairing, or improving real estate for others if the property is to be affixed to or made a structural part of a sanctuary.
  PA 365: Exempts certain products, equipment, machinery, and utilities sold or leased to an industrial laundry after December 31, 1997.
  PA 398: Specifies that the exemption for purchasing products related to agricultural production applies to grain drying equipment and natural or propane gas used to fuel that equipment for agricultural purposes.
  PA 451: Defines the term "hospital" for the purpose of the provisions which provide exemptions from the sales tax for the sale of property to contractors doing certain construction work for hospitals.
  PA 453: Permits lumber and building materials dealers to include the amount of taxable sales and gross proceeds from materials furnished to contractors on a credit basis in the first quarterly sales tax return due following the date the credit sale is made, rather than in the month the sale is made.
  PA 490: Provides an exemption for computer equipment used in connection with the computer-assisted production, storage, and transmission of data if the equipment would have been exempt had the data transfer been made using tapes, disks, CD-ROMs, or similar media by a company whose business includes publishing doctoral dissertations and information archiving, and that sells the majority of the company's products to nonprofit organizations that are themselves exempt from the federal income tax.
1999 PA 105: Exempts investment coins and bullion.
  PA 116: Provides that property granted an exemption in the sales tax act is exempt only to the extent it is used for tax exempt purposes; apportions industrial processing exemptions based on exempt and non-exempt uses of equipment; exempts trucks, trailers, and related parts purchased for use in interstate commerce; and expands the definition of "hospital" for the purpose of the exemption for property purchased for use in constructing, altering or repairing a non-profit hospital.
2000 PA 149: Provides that, if a person returns a previously purchased item for a refund or a credit, he or she will receive a refund or credit for any sales tax paid on the item.

  PA 204: Exempts sales to a domestic air carrier of an aircraft, or parts and materials (excludes shop equipment or fuel). The aircraft must transport air cargo and/or passengers and must have a maximum certified takeoff weight of at least 6,000 pounds.
  PA 242: Amends provisions regarding tax exempt sales by modifying the definition of "in good faith" so that it is straightforward and objective. Also extends the period that blanket exemption certificates apply and places more responsibility and burden on the Department of Treasury rather than the company making the sale.

  PA 329: Exempts from the sales tax, food and nonalcoholic beverages provided during work hours by an employer to employees who are employed in the business of preparing or selling prepared food intended for immediate consumption.
  PA 390: Specifies that, beginning September 20, 1999, sales taxes would apply to the transmission and distribution of electricity whether the electricity was purchased from the delivering utility or from another provider.

  PA 417: Exempts from the tax, sales of non-alcoholic beverages in sealed containers, sold from a vending machine or mobile facility.

2001 PA 40: Simplifies the procedure to recognize exemptions already in the law for purchases of aircraft for subsequent lease to carriers. The aircraft must be for use solely for regularly scheduled transport of passengers.

  PA 102: Eliminates wholesalers and authorized distribution agents of alcohol from the requirement of collecting and maintaining sales tax exemption certificates if such information is maintained in routine business records.

2002 PA 457: Updates a reference in the Sales Tax act exempting from the sales tax equipment used to provide mobile telecommunications services taxable under the use tax.
  PA 510: Allows the organizing entity of an internationally televised athletic event to apply the tax only to the amount charged for the taxable tangible personal property.
  PA 617: Exempts sales of motor vehicles, recreational watercraft, snowmobiles, or all terrain vehicles, and mobile homes to resident tribal members if the purchased item is for personal use and is to be used on the resident tribal member's tribe agreement area.
2004 PA 172, 173, 174, 175 Taken together, the bills authorize the state’s participation in the Streamlined Sales Tax Project, a multi-state effort to simplify sales and use tax collection and administration thereby increasing compliance with the taxes. To the extent that voluntary compliance is increased for remote sales involving mail order and Internet media, some portion of the estimated $250 million to $300 million would be collected. The simplified definitions in the act reduce revenues by an estimated $18 million, mostly in the sales tax.
2006 PA 17: Exempts certain aircraft and aircraft parts temporarily located in Michigan,
  PA 69: Reduces the amount of auto-related sales tax revenue deposited into the Comprehensive Transportation Fund by $11.1 million for FY06 and increases the amount of revenue deposited into the General Fund by the same amount.
  PA 577: Amends the Streamlined Sales and Use Tax Revenue Equalization Act to allow a nonprofit organization that sold an item at a charitable auction to claim a tax refund of 6% of the proceeds over the item's fair market value.
  PA 590: Exempts the sale of taxable personal property by the organizing entities of certain sporting events (PGA Championship, NCAA Men's Basketball Championship, and NCAA Men's Ice Hockey Championship).
  PA 657: Allows the State Treasurer to enter into an agreement with a motion picture production company to provide tax credits based on the level of spending in Michigan. Limits the total amount of credits to $7 million in any one year and holds the School Aid Fund harmless.
  PA 665: Exempts additions made to county long-term medical care facilities.

  PA 669: Maintains the exemptions for certain telecommunications machinery and equipment.
2007 PA 69: Reduces the amount of auto-related sales tax revenue deposited into the Comprehensive Transportation Fund by $5 million for FY07 and increases the amount of revenue deposited into the General Fund by the same amount.

  PA 105: Clarifies who may claim a bad debt allowance.

2008 PA 78: Limits the tax credit for production expenditures by eligible motion picture production companies to agreements entered into before February 29, 2008, (from December 31, 2010).

Use Tax
1997 PA 194: Exempts from the tax consumption of telephone service by means of prepaid telephone card, prepaid authorization number, and a charge for Internet access.
1998 PA 266: Alters the provisions that required prepayment of use taxes by certain retailers. Prepayment is no longer required; rather, taxes are to be paid twice in the month collected.
  PA 275: Exempts from the use tax the purchase of tangible personal property purchased by a person engaged in the business of constructing, altering, repairing, or improving real estate for others if the property is to be affixed to or made a structural part of a sanctuary.
  PA 366: Exempts certain products, equipment, machinery, and utilities used or consumed by an industrial laundry after December 31, 1997. Beginning in 1999, imposes use tax in the laundering of cleaning of textiles under a sale, rental, or service agreement with a term of at least 5 days. Restaurants and retailers are exempt from this tax.
  PA 452: Defines the term "hospital," for the purpose of the provisions which provide exemptions from the use tax for the sale of property to contractors doing certain construction work for hospitals.
  PA 491: Exempts computer equipment used in connection with the computer-assisted production, storage, and transmission of data if the equipment would have been exempt had the data transfer been made using tapes, disks, CD-ROMs, or similar media by a company whose business includes publishing doctoral dissertations and information archiving, and that sells the majority of the company's products to nonprofit organizations that are themselves exempt from the federal income tax.
1999 PA 70: Eliminates sunset on exemption of interstate motor carrier trucks, trailers, and related parts.
  PA 117: Provides that property granted an exemption in the use tax act is exempt only to the extent it is used for tax exempt purposes, apportions industrial processing exemptions based on exempt and non-exempt uses of equipment, specifies a bad debt deduction for the use tax similar to the sales tax, and expands the definition of "hospital" for purposes of the exemption for property purchased for use in constructing, altering or repairing a non-profit hospital.
  PA 225: Exempts the storage, use, and consumption of investment coins and bullion.
2000 PA 153: Provides that if a person returns a previously purchased item for a refund or a credit, he or she will receive a refund or credit for any use tax paid on the item.

  PA 200: Exempts the storage, use, or consumption of an aircraft purchased by, or for lease to, a domestic air carrier after September 30, 1996. The aircraft must be used for the transport of air cargo and/or passengers and must have a maximum certified takeoff weight of at least 6,000 pounds.
  PA 328: Exempts from the use tax, food and nonalcoholic beverages provided during work hours by an employer to employees who are employed in the business of preparing or selling prepared food intended for immediate consumption.
  PA 391: Specifies that beginning September 20, 1999, use taxes would apply to the transmission and distribution of electricity whether the electricity was purchased from the delivering utility or from another provider. The bill also provides that the use tax would apply to electricity, natural or artificial gas, or steam.
2001 PA 39: Simplifies the procedure to recognize exemptions already in the law for purchases of aircraft for subsequent lease to carriers. The aircraft must be for use solely for regularly scheduled transport of passengers.
2002 PA 110: Implements by law the established practice of taxing dealers exceeding the maximum number of allowable tax-exempt demonstration vehicles. The monthly tax equals (1) the use tax rate (6%) times 2.5% of the value of the vehicle (2) plus $30.
  PA 255: Permits a lessor to elect to pay the use tax on receipts from the rental or lease of tangible personal property instead of paying sales or use tax on the full cost at the time of acquisition. Lessors of aircraft, in order to make a valid election, must obtain a use tax registration by the earlier of the date set for the first payment of use tax under the lease agreement or 90 days after the aircraft is brought into the state.
  PA 455: Permits a service provider to separate intrastate and interstate taxable and nontaxable telecommunications and other services if the provider can reasonably identify the charges from records kept in the regular course of business.
  PA 456: Provides that the consumption of mobile telecommunications services are taxable in the same manner as tangible personal property regardless of where the services originated, terminated, or passed through. The determination of whether services are taxable is based on the location of the place of primary use, either in or outside of Michigan
  PA 511: Allows the organizing entity of a an internationally televised athletic event to apply the tax only to the amount charged for the rental of taxable tangible personal property or taxable services. The provisions are repealed effective January 1, 2007.
  PA 614: Exempts sales of motor vehicles, recreational watercraft, snowmobiles, or all terrain vehicles, and mobile homes to resident tribal members if the purchased item is for personal use and is to be used on the resident tribal member's tribe agreement area.
  PA 669: Provides for calculation of the tax on the price of diesel fuel used by interstate motor carriers in a qualified commercial motor vehicle, and requires this tax to be collected under the International Fuel Tax Agreement.
2003 PA 27: Exempts tangible personal property purchased out of the state, used solely for personal purposes, and brought into the state more than 90 days after the purchase.
2004 PA 172: See 2004 Public Acts 172-175 described in the Sales Tax portion of this section.
2006 PA 18: Exempts certain aircraft and aircraft parts temporarily located in Michigan.
  PA 666: Exempts additions made to county long-term medical care facilities.
  PA 18: Maintains the exemptions for certain telecommunications machinery and equipment.
  PA 673: Exempts the sale of taxable property and services by the organizing entities of certain sporting events (PGA Championship, NCAA Men's Basketball Championship, and NCAA Men's Ice Hockey Championship).
2007 PA 93: Extends the tax to the use or consumption of a number of services and provides exemptions for services sold to certain entities. PA 93 took effect December 1, 2007.

  PA 103: Clarifies when property that is converted from an exempt to a nonexempt use is subject to the Use Tax. Applies this clarification retroactively beginning September 30, 2002.

  PA 104: Clarifies who may claim a bad debt allowance.

  PA 145: Repeals PA 93 (Use Tax on services) effective December 1, 2007.

  PA 148: Prohibits a taxpayer from collecting the tax authorized under PA 93 (Use Tax on services) and requires the taxpayer to refund to the purchaser the tax proceeds if the tax is collected before the effective date of PA 93. Prohibits the Department of Treasury from collecting the tax authorized under PA 93; however, if a taxpayer collects the tax from a purchaser, it must be remitted to the Department. The Department is then required to refund to the purchaser the tax collected by the taxpayer.


Tobacco Products Tax
1997 PA 187: Creates a tax stamp for cigarettes sold in the state. Effective May 1, 1998, wholesalers may not sell cigarettes without a tax stamp. Effective September 1, 1998 retailers may not sell cigarettes without a tax stamp. Increases the fee retained by tobacco wholesalers who are required to do the stamping from 1% to 1.25%.
2002 PA 503: Increases the tax rate on cigarettes from $.75 to $1.25 per pack and other tobacco products from 16% to 20% of the wholesale price. Allocates the proceeds of the tax to various state funds and program uses.
2004 PA 164: Increased the tax on a pack of cigarettes from $1.25 to $2.00 effective July 1, 2004. Also the tax on other tobacco products was increased from 20% of the wholesale price to 32% of the wholesale price. The bill also specifies the distribution of tobacco products tax revenues to support various expenditures in the state budget.

Beer and Wine Taxes
1997 PA 198: Increases the limit on quantity of beer that a brewer may produce per year from 20,000 to 30,000 barrels and still qualify for the $2 per barrel tax credit.
1998 PA 58: Repeals the Michigan Liquor Control Act and replaces it with a new act, the Michigan Liquor Control Act of 1998 primarily reorganizing the former act's provisions into chapter form by subject matter.
2000 PA 395: Adds a section to the Michigan Liquor Control Code to allow certain brewers that produce over 200,000 barrels of beer per year to sell beer for on-premises consumption. The bill also revises the current eligibility requirements under which a brewer, microbrewer, or brewpub may claim a per barrel tax credit.

Liquor Taxes
1998 PA 58: Repeals the Michigan Liquor Control Act and replaces it with a new act, the Michigan Liquor Control Act of 1998 primarily reorganizing the former act's provisions into chapter form by subject matter.

Liquor Markup
1998 PA 58: Repeals the Michigan Liquor Control Act and replaces it with a new act, the Michigan Liquor Control Act of 1998 primarily reorganizing the former act's provisions into chapter form by subject matter.

Accommodations (Hotel-Motel) Tax
2006 PA 609: Increases the minimum population, from 600,000 to 750,000, of a county in which the accommodations tax under PA of 1985 is collected.
2007 PA 72: Transfers the year-end balance in the Convention Facility Development Fund, after distributions for debt service and allocations among counties, to the General Fund for FY07 only.

2007 PA 25: Creates a new Convention and Tourism Promotion Act, under which an existing convention bureau could levy an assessment of up to 2% of hotel/motel room charges to support marketing and promotion efforts.


Uniform City Utility Users Tax
1998 PA 548: Amends the City Utility Users Tax Act to reduce the population requirement to 750,000 from 1 million, for a city to be eligible to impose a city utility users tax.
  PA 241: Excludes casinos from the tax exemption allowed for public utility services provided in a renaissance zone.
2002 PA 50: Establishes a tax credit of 6% of eligible broadband investments and costs imposed by maintenance fees on telecommunications providers.
2002 PA 197: Eliminates the requirement that the tax rate be lowered when more than $45 million in revenue is collected and requires all of the tax revenue collected to be used to hire or retain police officers.

 

 

 

 

 

 

Last Updated July 22, 2008