Bill Text: MI HB4138 | 2011-2012 | 96th Legislature | Introduced
Bill Title: Sales tax; collections; sales tax on difference between trade-in and purchase price of new or used car, titled watercraft, or heavy moving equipment; provide for. Amends sec. 1 of 1933 PA 167 (MCL 205.51).
Spectrum: Partisan Bill (Republican 1-0)
Status: (Introduced - Dead) 2011-01-27 - Printed Bill Filed 01/27/2011 [HB4138 Detail]
Download: Michigan-2011-HB4138-Introduced.html
HOUSE BILL No. 4138
January 26, 2011, Introduced by Rep. Scott and referred to the Committee on Tax Policy.
A bill to amend 1933 PA 167, entitled
"General sales tax act,"
by amending section 1 (MCL 205.51), as amended by 2008 PA 438.
THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
Sec. 1. (1) As used in this act:
(a) "Person" means an individual, firm, partnership, joint
venture, association, social club, fraternal organization,
municipal or private corporation whether organized for profit or
not, company, estate, trust, receiver, trustee, syndicate, the
United States, this state, county, or any other group or
combination acting as a unit, and includes the plural as well as
the singular number, unless the intention to give a more limited
meaning is disclosed by the context.
(b) "Sale at retail" or "retail sale" means a sale, lease, or
rental of tangible personal property for any purpose other than for
resale, sublease, or subrent.
(c) "Gross proceeds" means sales price.
(d) "Sales price" means the total amount of consideration,
including cash, credit, property, and services, for which tangible
personal property or services are sold, leased, or rented, valued
in money, whether received in money or otherwise, and applies to
the measure subject to sales tax. Sales price includes the
following subparagraphs (i) through (vii) and excludes subparagraphs
(viii) through (x) (xiv):
(i) Seller's cost of the property sold.
(ii) Cost of materials used, labor or service cost, interest,
losses, costs of transportation to the seller, taxes imposed on the
seller other than taxes imposed by this act, and any other expense
of the seller.
(iii) Charges by the seller for any services necessary to
complete the sale, other than the following:
(A) An amount received or billed by the taxpayer for
remittance to the employee as a gratuity or tip, if the gratuity or
tip is separately identified and itemized on the guest check or
billed to the customer.
(B) Labor or service charges involved in maintenance and
repair work on tangible personal property of others if separately
itemized.
(iv) Delivery charges incurred or to be incurred before the
completion of the transfer of ownership of tangible personal
property subject to the tax levied under this act from the seller
to the purchaser. A seller is not liable under this act for
delivery charges allocated to the delivery of exempt property.
(v) Installation charges incurred or to be incurred before the
completion of the transfer of ownership of tangible personal
property from the seller to the purchaser.
(vi) Credit Except as otherwise provided in subparagraphs (xi),
(xii), (xiii), and (xiv), credit for any trade-in.
(vii) Except as otherwise provided in subparagraph (x),
consideration received by the seller from third parties if all of
the following conditions are met:
(A) The seller actually receives consideration from a party
other than the purchaser and the consideration is directly related
to a price reduction or discount on the sale.
(B) The seller has an obligation to pass the price reduction
or discount through to the purchaser.
(C) The amount of the consideration attributable to the sale
is fixed and determinable by the seller at the time of the sale of
the item to the purchaser.
(D) One of the following criteria is met:
(I) The purchaser presents a coupon, certificate, or other
documentation to the seller to claim a price reduction or discount
where the coupon, certificate, or documentation is authorized,
distributed, or granted by a third party with the understanding
that the third party will reimburse any seller to whom the coupon,
certificate, or documentation is presented.
(II) The purchaser identifies himself or herself to the seller
as a member of a group or organization entitled to a price
reduction or discount. A preferred customer card that is available
to any patron does not constitute membership in a group or
organization.
(III) The price reduction or discount is identified as a third
party price reduction or discount on the invoice received by the
purchaser or on a coupon, certificate, or other documentation
presented by the purchaser.
(viii) Interest, financing, or carrying charges from credit
extended on the sale of personal property or services, if the
amount is separately stated on the invoice, bill of sale, or
similar document given to the purchaser.
(ix) Any taxes legally imposed directly on the consumer that
are separately stated on the invoice, bill of sale, or similar
document given to the purchaser.
(x) Beginning January 1, 2000, employee discounts that are
reimbursed by a third party on sales of motor vehicles.
(xi) The agreed-upon value of a titled watercraft used as part
payment of the purchase price of a new titled watercraft or used
titled watercraft if the agreed-upon value is separately stated on
the invoice, bill of sale, or similar document given to the
purchaser.
(xii) The agreed-upon value of a motor vehicle or trailer coach
used as part payment of the purchase price of a new or used motor
vehicle or trailer coach if the agreed-upon value is separately
stated on the invoice, bill of sale, or similar document given to
the purchaser. As used in this subparagraph, "new motor vehicle"
means that term as defined in section 33a of the Michigan vehicle
code, 1949 PA 300, MCL 257.33a.
(xiii) The agreed-upon value of a piece of heavy earth moving
equipment used as part payment of the purchase price of a new or
used piece of heavy earth moving equipment if the agreed-upon value
is separately stated on the invoice, bill of sale, or similar
document given to the purchaser. As used in this subparagraph,
"heavy earth moving equipment" means industrial construction
equipment that meets all of the following criteria:
(A) Is self-propelled.
(B) Weighs 10,000 pounds or more.
(C) Is designed and principally intended to move, transport,
or reconfigure dirt, earth, soil, or other construction material at
a construction site.
(xiv) The agreed-upon value of a titled snowmobile used as part
payment of the purchase price of a new snowmobile or used
snowmobile if the agreed-upon value is separately stated on the
invoice, bill of sale, or similar document given to the purchaser.
(e) "Business" includes an activity engaged in by a person or
caused to be engaged in by that person with the object of gain,
benefit, or advantage, either direct or indirect.
(f) "Tax year" or "taxable year" means the fiscal year of the
state or the taxpayer's fiscal year if permission is obtained by
the taxpayer from the department to use the taxpayer's fiscal year
as the tax period instead.
(g) "Department" means the department of treasury.
(h) "Taxpayer" means a person subject to a tax under this act.
(i) "Tax" includes a tax, interest, or penalty levied under
this act.
(j) "Textiles" means goods that are made of or incorporate
woven or nonwoven fabric, including, but not limited to, clothing,
shoes, hats, gloves, handkerchiefs, curtains, towels, sheets,
pillows, pillow cases, tablecloths, napkins, aprons, linens, floor
mops, floor mats, and thread. Textiles also include materials used
to repair or construct textiles, or other goods used in the rental,
sale, or cleaning of textiles.
(2) If the department determines that it is necessary for the
efficient administration of this act to regard an unlicensed
person, including a salesperson, representative, peddler, or
canvasser as the agent of the dealer, distributor, supervisor, or
employer under whom the unlicensed person operates or from whom the
unlicensed person obtains the tangible personal property sold by
the unlicensed person, irrespective of whether the unlicensed
person is making sales on the unlicensed person's own behalf or on
behalf of the dealer, distributor, supervisor, or employer, the
department may so regard the unlicensed person and may regard the
dealer, distributor, supervisor, or employer as making sales at
retail at the retail price for the purposes of this act.
