Bill Text: MI HB5075 | 2015-2016 | 98th Legislature | Introduced
Bill Title: Sales tax; exemptions; property exemption for data centers; provide for. Amends sec. 12 of 1933 PA 167 (MCL 205.62) & adds sec. 4ee.
Spectrum: Partisan Bill (Republican 1-0)
Status: (Introduced - Dead) 2016-01-14 - Re-referred To Committee On Tax Policy [HB5075 Detail]
Download: Michigan-2015-HB5075-Introduced.html
HOUSE BILL No. 5075
November 10, 2015, Introduced by Rep. Yonker and referred to the Committee on Tax Policy.
A bill to amend 1933 PA 167, entitled
"General sales tax act,"
by amending section 12 (MCL 205.62), as amended by 2008 PA 438, and
by adding section 4ee.
THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
Sec. 4ee. (1) Subject to subsection (2), a sale of data center
equipment to the owner or operator of a data center or a colocated
business for use or consumption in the operations of the data
center is exempt from the tax under this act.
(2) The property under subsection (1) is exempt only to the
extent that the property is used for the exempt purposes stated in
this section. 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) As used in this section:
(a) "Colocated business" means a person that has entered into
a contract with the owner or operator of a data center to use or
deploy data center equipment in this state for a period of 2 or
more years.
(b) "Data center" means 1 or more buildings located in this
state owned or operated by an entity whose primary business is
owning, operating, managing, or maintaining a group of networked
computers for the purpose of centralizing the storage, processing,
management, or dissemination of data and includes any modular or
preassembled components, associated telecommunications and storage
systems and, if the data center includes more than 1 building or
physical location, any network or connection between those
buildings or locations, and the personal property used to operate,
maintain, or manage the facility and its business.
(c) "Data center equipment" means any material used in or in
support of a data center, including, but not limited to, computers,
servers, construction materials, infrastructure, machinery, wiring,
cabling, devices, tools, vehicles, technology, software, hardware,
equipment that would otherwise be considered a fixture, or related
equipment.
Sec. 12. (1) If an exemption from the tax under this act is
claimed, the seller shall obtain identifying information of the
purchaser and the reason for claiming the exemption at the time of
the purchase or at a later date. The seller shall obtain the same
information for a claimed exemption regardless of the medium in
which the transaction occurred.
(2) A seller shall use a standard format for claiming an
exemption electronically as adopted by the governing board under
the streamlined sales and use tax agreement.
(3) A purchaser is not required to provide a signature to
claim an exemption under this act unless a paper exemption form is
used.
(4) A seller shall maintain a proper record of all exempt
transactions and shall provide the record if requested by the
department.
(5) A seller who complies with the requirements of this
section is not liable for the tax if a purchaser improperly claims
an exemption. A purchaser who improperly claims an exemption is
liable for the tax due under this act. This subsection does not
apply if a seller fraudulently fails to collect the tax, solicits a
purchaser to make an improper claim for exemption, or accepts an
exemption form when the purchaser claims an entity-based exemption
if both of the following circumstances occur:
(a) The subject of the transaction sought to be covered by the
exemption form is actually received by the purchaser at a location
operated by the seller.
(b) The state in which that location operated by the seller is
located provides an exemption form that clearly and affirmatively
indicates that the claimed exemption is not available in that
state.
(6) A seller who obtains a fully completed exemption form or
captures the relevant data elements as outlined in this section
within 120 days after the date of sale is not liable for the tax.
(7) If the seller has not obtained an exemption form or all
relevant data elements, the seller may either prove that the
transaction was not subject to tax by other means or obtain a fully
completed exemption form from the purchaser, by the later of the
following:
(a) 120 days after a request by the department.
(b) The date an assessment becomes final.
(c) The denial of a claim for refund.
(d) In the instance of a credit audit, the issuance of an
audit determination letter or informal conference decision and
order of determination.
(e) The date of a final order of the court of claims or the
Michigan tax tribunal, as applicable, with respect to an
assessment, order, or decision of the department.
(8) The department may, in its discretion, allow a seller
additional time to comply with subsection (7).
(9) A seller is not liable for the tax under this act if the
seller obtains a blanket exemption form for a purchaser with which
the seller has a recurring business relationship. Renewals of
blanket exemption forms or updates of exemption form information or
data elements are not required if there is a recurring business
relationship between the seller and the purchaser. For purposes of
this section, a recurring business relationship exists when a
period of not more than 12 months elapses between sales
transactions.
(10) A certified service provider shall be considered a seller
under this section. As used in this section, "certified service
provider" means that term as defined in section 25 of the
streamlined sales and use tax administration act, 2004 PA 174, MCL
205.825.
