Bill Text: MI HB4561 | 2017-2018 | 99th Legislature | Introduced
Bill Title: Sales tax; exemptions; exemption for certain agricultural equipment; clarify. Amends sec. 4a of 1933 PA 167 (MCL 205.54a).
Spectrum: Partisan Bill (Republican 1-0)
Status: (Passed) 2018-04-26 - Assigned Pa 113'18 With Immediate Effect [HB4561 Detail]
Download: Michigan-2017-HB4561-Introduced.html
HOUSE BILL No. 4561
May 2, 2017, Introduced by Reps. Lauwers, VanderWall, Rendon and Barrett and referred to the Committee on Agriculture.
A bill to amend 1933 PA 167, entitled
"General sales tax act,"
by amending section 4a (MCL 205.54a), as amended by 2016 PA 431.
THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
Sec. 4a. (1) Subject to subsection (2), the following are
exempt from the tax under this act:
(a) A sale of tangible personal property not for resale to a
nonprofit school, nonprofit hospital, or nonprofit home for the
care and maintenance of children or aged persons operated by an
entity of government, a regularly organized church, religious, or
fraternal organization, a veterans' organization, or a corporation
incorporated under the laws of this state, if the income or benefit
from the operation does not inure, in whole or in part, to an
individual or private shareholder, directly or indirectly, and if
the activities of the entity or agency are carried on exclusively
for the benefit of the public at large and are not limited to the
advantage, interests, and benefits of its members or any restricted
group. A sale of tangible personal property to a parent cooperative
preschool is exempt from taxation under this act. As used in this
subdivision, "parent cooperative preschool" means a nonprofit,
nondiscriminatory educational institution, maintained as a
community service and administered by parents of children currently
enrolled in the preschool, that provides an educational and
developmental program for children younger than compulsory school
age, that provides an educational program for parents, including
active participation with children in preschool activities, that is
directed by qualified preschool personnel, and that is licensed
pursuant to 1973 PA 116, MCL 722.111 to 722.128.
(b) A sale of tangible personal property not for resale to a
regularly organized church or house of religious worship, except
the following:
(i) Sales in activities that are mainly commercial
enterprises.
(ii) Sales of vehicles licensed for use on public highways
other than a passenger van or bus with a manufacturer's rated
seating capacity of 10 or more that is used primarily for the
transportation of persons for religious purposes.
(c) The sale of food to bona fide enrolled students by a
school or other educational institution not operated for profit.
(d) The sale of a vessel designated for commercial use of
registered tonnage of 500 tons or more, if produced upon special
order of the purchaser, and bunker and galley fuel, provisions,
supplies, maintenance, and repairs for the exclusive use of the
vessel engaged in interstate commerce.
(e)
A sale of tangible personal property to persons a person
engaged
in a business enterprise and using or consuming that uses
or
consumes the tangible personal property
in the tilling,
planting,
draining, caring for, or harvesting of the things of the
soil;
in the breeding, raising, or caring for livestock, poultry,
or
horticultural products, including transfers of livestock,
poultry,
or horticultural products for further growth; or in the
direct
gathering of fish, by net, line, or otherwise only by an
owner-operator
of the business enterprise, not including a charter
fishing
business enterprise. This exemption includes machinery that
is
capable of simultaneously harvesting grain or other crops and
biomass
and machinery used for the purpose of harvesting biomass.
This
exemption includes agricultural land tile, which means fired
clay
or perforated plastic tubing used as part of a subsurface
drainage
system for land, and subsurface irrigation pipe, if the
land
tile or irrigation pipe is used in the production of
agricultural
products as a business enterprise. This exemption
includes
a portable grain bin, which means a structure that is used
or
is to be used to shelter grain and that is designed to be
disassembled
without significant damage to its component parts.
This
exemption also includes grain drying equipment and the fuel or
energy
source that powers that equipment for agricultural purposes.
This
exemption also includes tangible personal property affixed to
or
to be affixed to and directly used in the operation of either a
portable
grain bin or grain drying equipment. This exemption
includes
a sale of agricultural land tile, subsurface irrigation
pipe,
portable grain bins, and grain drying equipment to a person
in
the business of constructing, altering, repairing, or improving
real
estate for others to the extent that it is affixed to or made
a
structural part of real estate and is used for a purpose exempt
under
this subsection. This exemption does not include transfers of
food,
fuel, clothing, or any similar tangible personal property for
personal
living or human consumption. Except for agricultural land
tile,
subsurface irrigation pipe, portable grain bins, and grain
drying
equipment, this exemption does not include tangible personal
property
permanently affixed and becoming a structural part of real
estate.
As used in this subdivision, "biomass" means crop residue
used
to produce energy or agricultural crops grown specifically for
the
production of energy.for
either the tilling, planting,
draining, caring for, or harvesting of things of the soil for
agricultural purposes or the breeding, raising, or caring for
livestock, poultry, or horticultural products, including the
transfers of livestock, poultry, or horticultural products for
further growth. Except as otherwise provided under subsection (3),
this exemption includes the sale of any of the following to a
person described in this subdivision:
(i) Machinery that is capable of simultaneously harvesting
grain or other crops and biomass and machinery used for the purpose
of harvesting biomass.
(ii) Agricultural land tile and subsurface irrigation pipe.
(iii) Portable grain bins, including tangible personal
property affixed or to be affixed to portable grain bins and
directly used in the operation of a portable grain bin.
(iv) Grain drying equipment and the fuel or energy source that
powers that equipment, including tangible personal property affixed
or to be affixed to that equipment and directly used in the
operation of grain drying equipment.
(f) The sale of agricultural land tile, subsurface irrigation
pipe, portable grain bins, and grain drying equipment to a person
in the business of constructing, altering, repairing, or improving
real estate for others to the extent that it is affixed to and made
a structural part of real estate for others and is used for an
exempt purpose described under subdivision (e).
(g) The sale of tangible personal property used in the direct
gathering of fish, by net, line, or otherwise, by an owner-operator
of a business enterprise, not including a charter fishing business
enterprise.
(h) (f)
The sale of a copyrighted motion
picture film or a
newspaper or periodical admitted under federal postal laws and
regulations effective September 1, 1985 as second-class mail matter
or as a controlled circulation publication or qualified to accept
legal notices for publication in this state, as defined by law, or
any other newspaper or periodical of general circulation,
established not less than 2 years, and published not less than once
a week. Tangible personal property used or consumed in producing a
copyrighted motion picture film, a newspaper published more than 14
times per year, or a periodical published more than 14 times per
year, and not becoming a component part of that film, newspaper, or
periodical is subject to the tax. Tangible personal property used
or consumed in producing a newspaper published 14 times or less per
year or a periodical published 14 times or less per year and that
portion or percentage of tangible personal property used or
consumed in producing an advertising supplement that becomes a
component part of a newspaper or periodical is exempt from the tax
under this subdivision. For purposes of this subdivision, tangible
personal property that becomes a component part of a newspaper or
periodical and consequently not subject to tax includes an
advertising supplement inserted into and circulated with a
newspaper or periodical that is otherwise exempt from tax under
this subdivision, if the advertising supplement is delivered
directly to the newspaper or periodical by a person other than the
advertiser, or the advertising supplement is printed by the
newspaper or periodical.
(i) (g)
A sale of tangible personal
property to persons
licensed to operate commercial radio or television stations if the
property is used in the origination or integration of the various
sources of program material for commercial radio or television
transmission. This subdivision does not include a vehicle licensed
and titled for use on public highways or property used in the
transmission to or receiving from an artificial satellite.
(j) (h)
The sale of a prosthetic device,
durable medical
equipment, or mobility enhancing equipment.
(k) (i)
The sale of a vehicle not for
resale to a Michigan
nonprofit corporation organized exclusively to provide a community
with ambulance or fire department services.
(l) (j)
Before October 1, 2012, a sale of
tangible personal
property to inmates in a penal or correctional institution
purchased with scrip or its equivalent issued and redeemed by the
institution.
(m) (k)
A sale of textbooks sold by a public
or nonpublic
school to or for the use of students enrolled in any part of a
kindergarten through twelfth grade program.
(n) (l) A sale
of tangible personal property installed as a
component part of a water pollution control facility for which a
tax exemption certificate is issued pursuant to part 37 of the
natural resources and environmental protection act, 1994 PA 451,
MCL 324.3701 to 324.3708, or an air pollution control facility for
which a tax exemption certificate is issued pursuant to part 59 of
the natural resources and environmental protection act, 1994 PA
451, MCL 324.5901 to 324.5908.
(o) (m)
The sale or lease of the following
to an industrial
laundry after December 31, 1997:
(i) Textiles and disposable products including, but not
limited to, soap, paper, chemicals, tissues, deodorizers and
dispensers, and all related items such as packaging, supplies,
hangers, name tags, and identification tags.
(ii) Equipment, whether owned or leased, used to repair and
dispense textiles including, but not limited to, roll towel
cabinets, slings, hardware, lockers, mop handles and frames, and
carts.
(iii) Machinery, equipment, parts, lubricants, and repair
services used to clean, process, and package textiles and related
items, whether owned or leased.
(iv) Utilities such as electric, gas, water, or oil.
(v) Production washroom equipment and mending and packaging
supplies and equipment.
(vi) Material handling equipment including, but not limited
to, conveyors, racks, and elevators and related control equipment.
(vii) Wastewater pretreatment equipment and supplies and
related maintenance and repair services.
(p) (n)
A sale of tangible personal
property to a person
holding a direct payment permit under section 8 of the use tax act,
1937 PA 94, MCL 205.98.
(2) The tangible personal property under subsection (1) is
exempt only to the extent that that property is used for the exempt
purpose if one is stated in subsection (1). The exemption is
limited to the percentage of exempt use to total use determined by
a reasonable formula or method approved by the department.
(3) The exemptions under subsection (1)(e), (f), and (g) do
not include either of the following:
(a) The transfers of food, fuel, clothing, or any similar
tangible personal property for personal living or human
consumption.
(b) Except as provided under subsection (1)(f), tangible
personal property permanently affixed to and becoming a structural
part of real estate.
(4) As used in this section:
(a) "Agricultural land tile" means fired clay or perforated
plastic tubing used as part of a subsurface drainage system for
land.
(b) "Biomass" means crop residue used to produce energy or
agricultural crops grown specifically for the production of energy.
(c) "Portable grain bin" means a structure that is used or is
to be used to shelter grain and that is designed to be disassembled
without significant damage to its component parts.
Enacting section 1. This amendatory act clarifies the original
intent of the legislature that the exemption provided for by
section 4a(1)(e) of the general sales tax act, 1933 PA 167, MCL
205.54a, in regard to the tilling, planting, draining, caring for,
or harvesting of things of the soil is only applicable when these
activities are performed in a business enterprise that constitutes
an agricultural purpose.
