Bill Text: MI HB4335 | 2015-2016 | 98th Legislature | Introduced
Bill Title: Sales tax; collections; collection of sales tax on gasoline; eliminate. Amends secs. 2, 4, 6a & 25 of 1933 PA 167 (MCL 205.52 et seq.) & adds. sec. 2c.
Spectrum: Strong Partisan Bill (Republican 12-1)
Status: (Introduced - Dead) 2015-03-12 - Printed Bill Filed 03/12/2015 [HB4335 Detail]
Download: Michigan-2015-HB4335-Introduced.html
HOUSE BILL No. 4335
March 11, 2015, Introduced by Reps. Glenn, Graves, Johnson, Chatfield, Rendon, Hooker, Kelly, Lauwers, Webber, Callton, Kesto, Franz and Santana and referred to the Committee on Government Operations.
A bill to amend 1933 PA 167, entitled
"General sales tax act,"
by amending sections 2, 4, 6a, and 25 (MCL 205.52, 205.54, 205.56a,
and 205.75), sections 2 and 4 as amended by 2004 PA 173, section 6a
as amended by 2013 PA 1, and section 25 as amended by 2012 PA 226,
and by adding section 2c.
THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
Sec.
2. (1) Except as provided in section 2a, sections 2a and
2c, there is levied upon and there shall be collected from all
persons engaged in the business of making sales at retail, by which
ownership of tangible personal property is transferred for
consideration, an annual tax for the privilege of engaging in that
business equal to 6% of the gross proceeds of the business, plus
the penalty and interest if applicable as provided by law, less
deductions allowed by this act.
(2) The tax under subsection (1) also applies to the
following:
(a) The transmission and distribution of electricity, whether
the electricity is purchased from the delivering utility or from
another provider, if the sale is made to the consumer or user of
the electricity for consumption or use rather than for resale.
(b) The sale of a prepaid telephone calling card or a prepaid
authorization number for telephone use, rather than for resale,
including the reauthorization of a prepaid telephone calling card
or a prepaid authorization number.
(c) A conditional sale, installment lease sale, or other
transfer of property, if title is retained as security for the
purchase but is intended to be transferred later.
(3) Any person engaged in the business of making sales at
retail who is at the same time engaged in some other kind of
business, occupation, or profession not taxable under this act
shall keep books to show separately the transactions used in
determining the tax levied by this act. If the person fails to keep
separate books, there shall be levied upon him or her the tax
provided for in subsection (1) equal to 6% of the entire gross
proceeds of both or all of his or her businesses. The taxes levied
by this section are a personal obligation of the taxpayer.
(4) A meal provided free of charge or at a reduced rate to an
employee during work hours by a food service establishment licensed
by the Michigan department of agriculture for the convenience of
the employer is not considered transferred for consideration.
Sec. 2c. (1) Except as otherwise provided in this section, in
addition to any liability for the tax under this act under section
2 for sales at retail of tangible personal property other than
eligible fuel, there is levied upon and there shall be collected
from all persons engaged in the sale at retail of eligible fuel an
annual tax equal to the gross proceeds from the sale of eligible
fuel multiplied by the following rates, plus any penalty and
interest provided by law if applicable, less any deductions allowed
under this act:
(a) Before January 1, 2016, the sum of the following rates:
(i) 4%.
(ii) The additional rate of 2% approved by the electors on
March 15, 1994.
(b) Beginning January 1, 2016 through December 31, 2016, the
sum of the following rates:
(i) 3%.
(ii) The additional rate of 2% approved by the electors on
March 15, 1994.
(c) Beginning January 1, 2017 through December 31, 2017, the
sum of the following rates:
(i) 2%.
(ii) The additional rate of 2% approved by the electors on
March 15, 1994.
(d) Beginning January 1, 2018 through December 31, 2018, the
sum of the following rates:
(i) 1%.
(ii) The additional rate of 2% approved by the electors on
March 15, 1994.
(e) Beginning January 1, 2019 through December 31, 2019, the
additional rate of 2% approved by the electors on March 15, 1994
only.
(f) Beginning January 1, 2020 through December 31, 2020, 1%.
During this period, eligible fuel is exempt from the additional
rate of 2% approved by the electors on March 15, 1994.
(2) If any of the following occur, the sale at retail of
eligible fuel shall be subject to the tax under this act at the
rate provided in section 2:
(a) Beginning January 1, 2016 through December 31, 2020, the
total state appropriations in the school aid budget in any year is
less than the total state appropriations in the school aid budget
in the immediately preceding year.
(b) Beginning January 1, 2016 through December 31, 2020, the
sum of total state appropriations to cities, villages, townships,
and counties under all of the following is less than the sum of
total state appropriations to cities, villages, townships, and
counties in the immediately preceding year:
(i) Constitutional revenue sharing as prescribed in section 10
of article IX of the state constitution of 1963.
(ii) Statutory revenue sharing for the municipality under the
Glenn Steil state revenue sharing act of 1971, 1971 PA 140, MCL
141.901 to 141.921, combined with any payment under an economic
vitality incentive program, or successor program.
(iii) 1951 PA 51, MCL 247.651 to 247.675.
(3) Subject to subsection (4) and except as otherwise provided
in this subsection, beginning January 1, 2021, a person subject to
the tax under this act may exclude from the gross proceeds used for
the computation of the tax the sale of eligible fuel. This
subsection does not apply if the sale at retail of eligible fuel is
subject to the tax under this act at the rate provided in section 2
as provided in subsection (2).
(4) Except as otherwise provided in this subsection, if the
final order of a court of competent jurisdiction for which all
rights of appeal have been exhausted or have expired determines
that any part of this section is unconstitutional or unenforceable,
beginning on the effective date of that final order a person
subject to the tax under this act may exclude from the gross
proceeds used for the computation of the tax the sale of eligible
fuel. This subsection does not apply if the sale at retail of
eligible fuel is subject to the tax under this act at the rate
provided in section 2 as provided in subsection (2).
(5) As used in this section, "eligible fuel" means any fuel
subject to the tax levied under the motor fuel tax act, 2000 PA
403, MCL 207.1001 to 207.1170.
Sec. 4. (1) In computing the amount of tax levied under this
act for any month, a taxpayer not subject to section 6(2) may
deduct the amount provided by subdivision (a) or (b), whichever is
greater:
(a) If the tax that accrued to this state from the sales at
retail during the preceding month is remitted to the department on
or before the twelfth day of the month in which remittance is due,
0.75% of the tax due at a rate of not more than 4% for the
preceding monthly period, but not to exceed $20,000.00 of the tax
due for that month. If the tax that accrued to this state from the
sales at retail during the preceding month is remitted to the
department after the twelfth day and on or before the twentieth day
of the month in which remittance is due, 0.50% of the tax due at a
rate of not more than 4% for the preceding monthly period, but not
to exceed $15,000.00 of the tax due for that month.
(b) The tax at a rate of not more than 4% due on $150.00 of
taxable gross proceeds for the preceding monthly period, or a
prorated portion of $150.00 of the taxable gross proceeds for the
preceding month if the taxpayer engaged in business for less than a
month.
(2) Beginning January 1, 1999, in computing the amount of tax
levied under this act for any month, a taxpayer who is subject to
section 6(2) may deduct from the amount of the tax paid 0.50% of
the tax due at a rate of not more than 4%.
(3) A deduction is not allowed under this section for payments
of taxes made to the department after the day the taxpayer is
required to pay, pursuant to section 6, the tax imposed by this
act.
(4) If, pursuant to section 6(4), the department prescribes
the filing of returns and the payment of the tax for periods in
excess of 1 month, a taxpayer is entitled to a deduction from the
tax collections remitted to the department for the extended payment
period that is equivalent to the deduction allowed under subsection
(1) or (2) for monthly periods.
(5) The department may prescribe the filing of estimated
returns and annual periodic reconciliations as necessary to carry
out the purposes of this section.
(6) A seller registered under the streamlined sales and use
tax agreement may claim a deduction under this section if provided
for in the streamlined sales and use tax administration act.
Sec. 6a. (1) Through March 31, 2013, at the time of purchase
or shipment from a refiner, pipeline terminal operator, or marine
terminal operator, a purchaser or receiver of gasoline shall prepay
a portion of the tax imposed by this act at the rate provided in
this section to the refiner, pipeline terminal operator, or marine
terminal operator for the purchase or receipt of gasoline. If the
purchase or receipt of gasoline is made outside this state for
shipment into and subsequent sale within this state, the purchaser
or receiver, other than a refiner, pipeline terminal operator, or
marine terminal operator, shall make the prepayment required by
this
section directly to the department. Prepayments Before the
effective date of the amendatory act that added section 2c,
prepayments for gasoline shall be made at a cents-per-gallon rate
determined by the department and shall be based on 6% of the
statewide average retail price of a gallon of self-serve unleaded
regular gasoline as determined and certified by the department
rounded up to the nearest 1/10 of 1 cent. Beginning on the
effective date of the amendatory act that added section 2c,
prepayments for gasoline shall be made at a cents-per-gallon rate
determined by the department and shall be based on the statewide
average retail price of a gallon of self-serve unleaded regular
gasoline as determined and certified by the department multiplied
by the applicable rate and rounded up to the nearest 1/10 of 1
cent. A person that makes prepayments directly to the department
shall make those prepayments according to the schedule in
subsection (6).
(2) Beginning April 1, 2013, at the time of purchase or
shipment from a refiner, pipeline terminal operator, or marine
terminal operator, a purchaser or receiver of fuel shall prepay a
portion of the tax imposed by this act at the rates provided in
this section to the refiner, pipeline terminal operator, or marine
terminal operator for the purchase or receipt of fuel. If the
purchase or receipt of fuel is made outside this state for shipment
into and subsequent sale within this state, the purchaser or
receiver, other than a refiner, pipeline terminal operator, or
marine terminal operator, shall make the prepayment required by
this
section directly to the department. Prepayments Before the
effective date of the amendatory act that added section 2c,
prepayments for gasoline shall be made at a cents-per-gallon rate
determined by the department and shall be based on 6% of the
statewide average retail price of a gallon of self-serve unleaded
regular gasoline as determined and certified by the department
rounded
up to the nearest 1/10 of 1 cent. Prepayments Beginning on
the effective date of the amendatory act that added section 2c,
prepayments for gasoline shall be made at a cents-per-gallon rate
determined by the department and shall be based on the statewide
average retail price of a gallon of self-serve unleaded regular
gasoline as determined and certified by the department multiplied
by the applicable rate and rounded up to the nearest 1/10 of 1
cent. Before the effective date of the amendatory act that added
section 2c, prepayments for diesel fuel shall be made at a cents-
per-gallon rate determined by the department and shall be based on
6% of the statewide average retail price of a gallon of undyed No.
2 ultra-low sulfur diesel fuel as determined and certified by the
department rounded up to the nearest 1/10 of 1 cent. Beginning on
the effective date of the amendatory act that added section 2c,
prepayments for diesel fuel shall be made at a cents-per-gallon
rate determined by the department and shall be based on the
statewide average retail price of a gallon of undyed No. 2 ultra-
low sulfur diesel fuel as determined and certified by the
department multiplied by the applicable rate and rounded up to the
nearest 1/10 of 1 cent. A person that makes prepayments directly to
the department shall make those prepayments according to the
schedule in subsection (6).
(3) Through March 31, 2013, the rate of prepayment applied
pursuant to subsection (1) shall be determined every 3 months by
the department unless the department certifies that the change in
the statewide average retail price of a gallon of self-serve
unleaded regular gasoline has been less than 10% since the
establishment of the rate of prepayment then in effect.
(4) Beginning April 1, 2013, the rates of prepayment applied
pursuant to subsection (2) shall be determined every month by the
department. Notwithstanding subsection (3), the department shall
publish notice of the rates of prepayment applicable to gasoline
and diesel fuel pursuant to subsection (2) not later than the tenth
day of the month immediately preceding the month in which the rate
is effective.
(5) A person subject to tax under this act that makes
prepayment to another person as required by this section for
gasoline may claim an estimated prepayment credit on its regular
monthly return filed pursuant to section 6. The credit shall be for
prepayments made during the month for which the return is required
and shall be based upon the difference between prepayments made in
the immediately preceding month and collections of prepaid tax
received from sales or transfers during the month for which the
return required under section 6 is made. A sale or transfer for
which collection of prepaid tax is due the taxpayer is subject to a
bad debt deduction under section 4i, whether or not the sale or
transfer is a sale at retail. The credit shall not be reduced
because of actual shrinkage. A taxpayer that does not, in the
ordinary course of business, sell gasoline in each month of the
year may, with the approval of the department, base the initial
prepayment deduction in each tax year on prepayments made in a
month other than the immediately preceding month. The difference in
actual prepayments shall be reconciled on the annual return in
accordance with procedures prescribed by the department.
(6) Notwithstanding the other provisions for the payment and
remitting of tax due under this act, a refiner, pipeline terminal
operator, or marine terminal operator shall account for and remit
to the department the prepayments received pursuant to this section
in accordance with the following schedule:
(a) On or before the twenty-fifth of each month, prepayments
received after the end of the preceding month and before the
sixteenth of the month in which the prepayments are made.
(b) On or before the tenth of each month, payments received
after the fifteenth and before the end of the preceding month.
(7) A refiner, pipeline terminal operator, or marine terminal
operator that fails to remit prepayments made by a purchaser or
receiver of fuel is subject to the penalties provided by 1941 PA
122, MCL 205.1 to 205.31.
(8) The refiner, pipeline terminal operator, or marine
terminal operator shall not receive a deduction under section 4 for
receiving and remitting prepayments from a purchaser or receiver
pursuant to this section.
(9) The purchaser or receiver of fuel that makes prepayments
is not subject to further liability for the amount of the
prepayment if the refiner, pipeline terminal operator, or marine
terminal operator fails to remit the prepayment.
(10) A person subject to tax under this act that makes
prepayment to another person as required by this section for diesel
fuel may claim an estimated prepayment credit on its regular
monthly return filed pursuant to section 6. The credit shall be for
prepayments made during the month for which the return is required
and shall be based upon the difference between the prepayments made
in the immediately preceding month and collections of prepaid tax
received from sales or transfers during the month for which the
return required under section 6 is made. A sale or transfer for
which collection of prepaid tax is due the taxpayer is subject to a
bad debt deduction under section 4i, whether or not the sale or
transfer is a sale at retail. The credit shall not be reduced
because of actual shrinkage. A taxpayer that does not, in the
ordinary course of business, sell diesel fuel in each month of the
year may, with the approval of the department, base the initial
prepayment deduction in each tax year on prepayments made in a
month other than the immediately preceding month. Estimated
prepayment credits claimed with the return due in April 2013 shall
be based on the taxpayer's retail sales of diesel fuel in March
2013. The difference in actual prepayments shall be reconciled on
the annual return in accordance with procedures prescribed by the
department. Repayment of the credit claimed on the return due in
April 2013 shall be made by the earlier of the date that the
taxpayer stops selling diesel fuel or October 15, 2013.
(11) As used in this section:
(a) "Blendstock" includes all of the following:
(i) Any petroleum product component of fuel, such as naphtha,
reformate, or toluene.
(ii) Any oxygenate that can be blended for use in a motor fuel.
(b) "Boat terminal transfer" means a dock, a tank, or
equipment contiguous to a dock or a tank, including equipment used
in the unloading of fuel from a ship and in transferring the fuel
to a tank pending wholesale bulk reshipment.
(c) "Diesel fuel" means any liquid other than gasoline that is
capable of use as a fuel or a component of a fuel in a motor
vehicle that is propelled by a diesel-powered engine or in a
diesel-powered train. Diesel fuel includes number 1 and number 2
fuel oils and mineral spirits. Diesel fuel also includes any
blendstock or additive that is sold for blending with diesel fuel
and any liquid prepared, advertised, offered for sale, sold for use
as, or used in the generation of power for the propulsion of a
diesel-powered engine, airplane, or marine vessel. An additive or
blendstock is presumed to be sold for blending unless a
certification is obtained for federal purposes that the substance
is for a use other than blending for diesel fuel. Diesel fuel does
not include dyed diesel fuel, kerosene, or an excluded liquid.
(d) "Dyed diesel fuel" means diesel fuel that is dyed in
accordance with internal revenue service rules or pursuant to any
other internal revenue service requirements, including any
invisible marker requirements.
(e) "Excluded liquid" means that term as defined in 26 CFR
48.4081-1.
(f) "Fuel" means gasoline and diesel fuel that is subject to
tax under this act, collectively, except when gasoline or diesel
fuel is referred to separately.
(g) "Gasoline" means and includes gasoline, alcohol, gasohol,
casing head or natural gasoline, benzol, benzine, naphtha,
methanol, any blendstock additive, or other product that is sold
for blending with gasoline or for use on the road, other than
products typically sold in containers of less than 5 gallons.
Gasoline also includes a liquid prepared, advertised, offered for
sale, sold for use as, or used in the generation of power for the
propulsion of a motor vehicle, airplane, or marine vessel,
including a product obtained by blending together any 1 or more
products of petroleum, with or without another product, and
regardless of the original character of the petroleum products
blended, if the product obtained by the blending is capable of use
in the generation of power for the propulsion of a motor vehicle,
airplane, or marine vessel. The blending of all of the above-named
products, regardless of their name or characteristics, shall
conclusively be presumed to have been done to produce fuel, unless
the product obtained by the blending is entirely incapable of use
as fuel. An additive or blendstock is presumed to be sold for
blending unless a certification is obtained for federal purposes
that the substance is for a use other than blending for gasoline.
Gasoline does not include diesel fuel, dyed diesel fuel, kerosene,
or an excluded liquid.
(h) "Kerosene" means all grades of kerosene, including, but
not limited to, the 2 grades of kerosene, No. 1-K and No. 2-K,
commonly known as K-1 kerosene and K-2 kerosene, respectively,
described in American society for testing and materials
specification D-3699, in effect on January 1, 1999, and kerosene-
type jet fuel described in American society for testing and
materials specification D-1655 and military specifications MIL-T-
5624r and MIL-T-83133d (grades jp-5 and jp-8), and any successor
internal revenue service rules or regulations, as the specification
for kerosene and kerosene-type jet fuel. Kerosene does not include
an excluded liquid.
(i) "Marine terminal operator" means a person that stores fuel
at a boat terminal transfer.
(j) "Pipeline terminal operator" means a person that stores
fuel in tanks and equipment used in receiving and storing fuel from
interstate and intrastate pipelines pending wholesale bulk
reshipment.
(k) "Purchase" or "shipment" does not include an exchange of
fuel or an exchange transaction between refiners, pipeline terminal
operators, or marine terminal operators.
(l) "Refiner" means a person that manufactures or produces fuel
by any process involving substantially more than the blending of
fuel.
Sec. 25. (1) All money received and collected under this act
shall be deposited by the department in the state treasury to the
credit of the general fund, except as otherwise provided in this
section.
(2) Fifteen percent of the collections of the tax imposed at a
rate of not more than 4% shall be distributed to cities, villages,
and townships pursuant to the Glenn Steil state revenue sharing act
of 1971, 1971 PA 140, MCL 141.901 to 141.921.
(3) Sixty percent of the collections of the tax imposed at a
rate of not more than 4% shall be deposited in the state school aid
fund established in section 11 of article IX of the state
constitution of 1963 and distributed as provided by law. In
addition, all of the collections of the tax imposed at the
additional rate of 2% approved by the electors March 15, 1994 shall
be deposited in the state school aid fund.
(4) Not less than 27.9% of 25% of the collections of the
general sales tax imposed at a rate of not more than 4% directly or
indirectly on fuels sold to propel motor vehicles upon highways, on
the sale of motor vehicles, and on the sale of the parts and
accessories of motor vehicles by new and used car businesses, used
car businesses, accessory dealer businesses, and gasoline station
businesses as classified by the department of treasury shall be
deposited each year into the comprehensive transportation fund
created in section 10b of 1951 PA 51, MCL 247.660b.
(5) For the fiscal year ending September 30, 2013 only, an
amount equal to 18% of the collections of the tax imposed at a rate
of not more than 4% under this act from the sale of motor fuel, as
that term is defined in section 4 of the motor fuel tax act, 2000
PA 403, MCL 207.1004, shall be distributed as follows:
(a) An amount sufficient to match available federal highway
funds shall be deposited into the state trunk line fund created in
section 11 of 1951 PA 51, MCL 247.661, for the purpose of matching
federal aid highway funds as those federal funds are made available
to this state, but not less than 39.1% subject to subdivision (c).
(b) After the distribution under subdivision (a), any
remaining balance, subject to subdivision (c), shall be distributed
as follows:
(i) 66% to the county road commissions of this state, which
distribution shall be administered under section 12 of 1951 PA 51,
MCL 247.662.
(ii) 34% to the cities and villages of this state, which
distribution shall be administered under section 13 of 1951 PA 51,
MCL 247.663.
(c) Funds distributed under this subsection shall not exceed
$100,000,000.00.
(6) For the fiscal year ending September 30, 2013 only and
except as otherwise limited in this subsection after the
allocations and distributions are made pursuant to subsections (2)
and (3), an amount equal to the collections of the tax imposed at a
rate of not more than 4% under this act from the sale at retail of
aviation fuel and aviation products shall be deposited in the state
aeronautics fund and shall be expended, on appropriation, only for
those purposes authorized in the aeronautics code of the state of
Michigan, 1945 PA 327, MCL 259.1 to 259.208. Not more than
$10,000,000.00 shall be deposited in the state aeronautics fund
under this subsection. As used in this subsection, "state
aeronautics fund" means the state aeronautics fund created in
section 34 of the aeronautics code of the state of Michigan, 1945
PA 327, MCL 259.34.
(7) An amount equal to the collections of the tax imposed at a
rate of not more than 4% under this act from the sale at retail of
computer software as defined in section 1a shall be deposited in
the Michigan health initiative fund created in section 5911 of the
public health code, 1978 PA 368, MCL 333.5911, and shall be
considered in addition to, and is not intended as a replacement for
any other money appropriated to the department of community health.
The funds deposited in the Michigan health initiative fund on an
annual basis shall not be less than $9,000,000.00 or more than
$12,000,000.00.
(8) The balance in the state general fund shall be disbursed
only on an appropriation or appropriations by the legislature.
Enacting section 1. This amendatory act takes effect 90 days
after the date it is enacted into law.
