Bill Text: MI HB4203 | 2019-2020 | 100th Legislature | Enrolled
Bill Title: Sales tax: exemptions; exemption for prosthetic devices; modify definition. Amends sec. 1a of 1933 PA 167 (MCL 205.51a) & adds sec. 4ff.
Spectrum: Partisan Bill (Republican 2-0)
Status: (Passed) 2020-03-04 - Assigned Pa 46'20 With Immediate Effect [HB4203 Detail]
Download: Michigan-2019-HB4203-Enrolled.html
state of michigan
100th Legislature
Regular session of 2020
Introduced by Reps. Afendoulis and Kahle
ENROLLED HOUSE BILL No. 4203
AN ACT to amend
1933 PA 167, entitled “An act to provide for the raising of additional public
revenue by prescribing certain specific taxes, fees, and charges to be paid to
the state for the privilege of engaging in certain business activities; to
provide, incident to the enforcement thereof, for the issuance of licenses to
engage in such occupations; to provide for the ascertainment, assessment and
collection thereof; to appropriate the proceeds thereof; and to prescribe
penalties for violations of the provisions of this act,” by amending section 1a
(MCL 205.51a), as amended by 2017 PA 221, and by adding section 4ff.
The People of the
State of Michigan enact:
Sec. 1a. As used
in this act:
(a) “Alcoholic
beverage” means a beverage suitable for human consumption that contains 1/2 of
1% or more of alcohol by volume.
(b) “Computer”
means an electronic device that accepts information in digital or similar form
and manipulates it for a result based on a sequence of instructions.
(c) “Computer
software” means a set of coded instructions designed to cause a computer or
automatic data processing equipment to perform a task.
(d) “Delivered
electronically” means delivered from the seller to the purchaser by means other
than tangible storage media.
(e) “Delivery
charges” means charges by the seller for preparation and delivery to a location
designated by the purchaser of tangible personal property or services. Delivery
charges include, but are not limited to, transportation, shipping, postage,
handling, crating, and packing. Beginning September 1, 2004, delivery charges
do not include the charges for delivery of direct mail if the charges are
separately stated on an invoice or similar billing document given to the
purchaser. If a shipment includes both exempt property and taxable property,
the seller shall allocate the delivery charge using 1 of the following methods:
(i) Multiply the delivery price by a fraction,
the numerator of which is the total sales prices of the taxable property and
the denominator of which is the total sales prices of all property in the shipment.
(ii)
Multiply the delivery price by a fraction, the numerator of which is the total
weight of the taxable property and the denominator of which is the total weight
of all property in the shipment.
(f) “Dental prosthesis” means a bridge, crown,
denture, or other similar artificial device used to repair or replace intraoral
defects such as missing teeth, missing parts of teeth, and missing soft or hard
structures of the jaw or palate.
(g) “Dietary supplement” means any product,
other than tobacco, intended to supplement the diet that is all of the
following:
(i)
Required to be labeled as a dietary supplement identifiable by the “supplement
facts” box found on the label as required by 21 CFR 101.36.
(ii)
Contains 1 or more of the following dietary ingredients:
(A) A vitamin.
(B) A mineral.
(C) An herb or other botanical.
(D) An amino acid.
(E) A dietary substance for use by humans to
supplement the diet by increasing the total dietary intake.
(F) A concentrate, metabolite, constituent,
extract, or combination of any ingredient listed in sub-subparagraphs (A) to
(E).
(iii)
Intended for ingestion in tablet, capsule, powder, softgel, gelcap, or liquid
form, or if not intended for ingestion in 1 of those forms, is not represented
as conventional food or for use as a sole item of a meal or of the diet.
(h) “Direct mail” means printed material
delivered or distributed by United States mail or other delivery service to a
mass audience or to addressees on a mailing list provided by the purchaser or
at the direction of the purchaser if the cost of the items are not billed
directly to the recipients, including tangible personal property supplied
directly or indirectly by the purchaser to the direct mail seller for inclusion
in the package containing the printed material, but not including multiple
items of printed material delivered to a single address.
(i) “Drug” means a compound, substance, or
preparation, or any component of a compound, substance, or preparation, other
than food or food ingredients, dietary supplements, or alcoholic beverages,
intended for human use that is 1 or more of the following:
(i)
Recognized in the official United States pharmacopoeia, official homeopathic
pharmacopoeia of the United States, or official national formulary, or in
any of their supplements.
(ii)
Intended for use in the diagnosis, cure, mitigation, treatment, or prevention
of disease.
(iii)
Intended to affect the structure or any function of the body.
(j) “Durable medical equipment” means
equipment for home use, other than mobility enhancing equipment, dispensed
pursuant to a prescription, including durable medical equipment repair or
replacement parts, that does all of the following:
(i)
Can withstand repeated use.
(ii)
Is primarily and customarily used to serve a medical purpose.
(iii)
Is not useful generally to a person in the absence of illness or injury.
(iv)
Is not worn in or on the body.
(k) “Durable medical equipment repair or
replacement parts” includes all components or attachments used in conjunction
with durable medical equipment.
(l)
“Electronic” means relating to technology having electrical, digital, magnetic,
wireless, optical, electromagnetic, or similar capabilities.
(m) “Lease or rental” means any transfer of
possession or control of tangible personal property for a fixed or
indeterminate term for consideration and may include future options to purchase
or extend. This definition applies only to leases and rentals entered into
after September 1, 2004 and has no retroactive impact on leases and rentals
that existed on that date. Lease or rental does not include the following
subparagraphs (i) to (iii) and includes subparagraph (iv):
(i) A
transfer of possession or control of tangible personal property under a
security agreement or deferred payment plan that requires the transfer of title
upon completion of the required payments.
(ii) A
transfer of possession or control of tangible personal property under an
agreement requiring transfer of title upon completion of the required payments
and payment of an option price that does not exceed $100.00 or 1% of the total
required payments, whichever is greater.
(iii)
The provision of tangible personal property along with an operator for a fixed
or indeterminate period of time, if that operator is necessary for the equipment
to perform as designed. To be necessary, an operator must do more than
maintain, inspect, or set up the tangible personal property.
(iv)
An agreement covering motor vehicles or trailers if the amount of consideration
may be increased or decreased by reference to the amount realized upon sale or
disposition of the property as defined in section 7701(h)(1) of the
internal revenue code of 1986, 26 USC 7701(h)(1).
(n) “Mobility enhancing equipment” means
equipment, other than durable medical equipment or a motor vehicle or equipment
on a motor vehicle normally provided by a motor vehicle manufacturer, dispensed
pursuant to a prescription, including repair or replacement parts for that
equipment, that is all of the following:
(i)
Primarily and customarily used to provide or increase the ability to move from
1 place to another and is appropriate for use at home or on a motor vehicle.
(ii)
Not generally used by a person with normal mobility.
(o) “Prescription” means an order, formula, or
recipe, issued in any form of oral, written, electronic, or other means of
transmission by a licensed physician or other health professional as defined in
section 3501 of the insurance code of 1956, 1956 PA 218, MCL 500.3501. For a
hearing aid, prescription includes an order, instruction, or direction of a
hearing aid dealer or salesperson licensed under article 13 of the occupational
code, 1980 PA 299, MCL 339.1301 to 339.1309.
(p) “Prewritten computer software” means
computer software, including prewritten upgrades, that is delivered by any
means and that is not designed and developed by the author or other creator to
the specifications of a specific purchaser. Prewritten computer software
includes the following:
(i)
Any combination of 2 or more prewritten computer software programs or portions
of prewritten computer software programs.
(ii)
Computer software designed and developed by the author or other creator to the
specifications of a specific purchaser if it is sold to a person other than
that specific purchaser.
(iii)
The modification or enhancement of prewritten computer software or portions of
prewritten computer software if the modification or enhancement is designed and
developed to the specifications of a specific purchaser unless there is a
reasonable, separately stated charge or an invoice or other statement of the
price is given to the purchaser for the modification or enhancement. If a
person other than the original author or creator modifies or enhances
prewritten computer software, that person is considered to be the author or
creator of only that person’s modifications or enhancements.
(q) “Prosthetic device” means, except as
provided in section 4ff, a replacement, corrective, or supportive device, other
than contact lenses and dental prosthesis, dispensed pursuant to a
prescription, including repair or replacement parts for that device, worn on or
in the body to do 1 or more of the following:
(i)
Artificially replace a missing portion of the body.
(ii)
Prevent or correct a physical deformity or malfunction of the body.
(iii)
Support a weak or deformed portion of the body.
(r) “Tangible personal property” means
personal property that can be seen, weighed, measured, felt, or touched or that
is in any other manner perceptible to the senses and includes electricity, water,
gas, steam, and prewritten computer software.
(s) “Tobacco” means cigarettes, cigars,
chewing or pipe tobacco, or any other item that contains tobacco.
Sec. 4ff. (1) The sale to a hospital or
freestanding surgical outpatient facility of a prosthetic device for
implantation into a human is exempt from the tax imposed by this act.
(2) As used in this section:
(a) “Freestanding surgical outpatient
facility” means a facility licensed under part 208 of the public health code,
1978 PA 368, MCL 333.20801 to 333.20821.
(b) “Hospital” means a hospital licensed under
part 215 of the public health code, 1978 PA 368, MCL 333.21501 to 333.21571.
(c) “Prosthetic device” means a replacement,
corrective, or supportive device, other than contact lenses and dental prosthesis,
including repair or replacement parts for that device, worn on or in the body
to do 1 or more of the following:
(i) Artificially replace a missing
portion of the body.
(ii) Prevent or correct a physical
deformity or malfunction of the body.
(iii) Support a weak or deformed
portion of the body.
Clerk of the House of Representatives
Secretary of the Senate
Approved___________________________________________
____________________________________________________
Governor