SENATE BILL NO. 1157 May 21, 1998, Introduced by Senators STEIL, EMMONS and ROGERS and referred to the Committee on Finance. A bill to amend 1937 PA 94, entitled "Use tax act," by amending sections 4f and 6 (MCL 205.94f and 205.96), as amended by 1993 PA 326. THE PEOPLE OF THE STATE OF MICHIGAN ENACT: 1 Sec. 4f. (1) In computing the amount of tax payments 2 required for any month of a seller not subject to section 6(2) 3 who collects the tax from the purchaser under the provisions of 4 this act, the seller who collects the tax from a purchaser may 5 deduct the amount provided by subdivision (a) or (b), whichever 6 is greater: 7 (a) If the tax that accrued to the state from the purchase 8 of tangible personal property or services during the preceding 9 month is remitted to the department on or before the seventh day 10 of the month in which remittance is due, 0.75% of the tax 06457'98 CSC 2 1 collected at a rate of 4% for the preceding monthly period, but 2 not to exceed $20,000.00 of the tax collected for that month. If 3 the tax that accrued to the state from the purchase of tangible 4 personal property or services during the preceding month is 5 remitted to the department after the seventh day of the month and 6 on or before the fifteenth day of the month in which remittance 7 is due, 0.50% of the tax collected at a rate of 4% for the pre- 8 ceding monthly period, but not to exceed $15,000.00 of the tax 9 collected for that month. 10 (b) The tax collected at a rate of 4% on $150.00 of taxable 11 purchase price for the preceding monthly period or a prorated 12 portion of $150.00 of the taxable purchase price for the preced- 13 ing month if the seller engaged in business for less than a 14 month. 15 (2)InBEFORE JANUARY 1, 1999, IN computing the amount of 16 tax levied under this act for any month, a seller who collects 17 the tax from the purchaser under this act and who is subject to 18 section 6(2) may deduct the amount provided in this subsection. 19 If the tax that is due to the state from the purchase of tangible 20 personal property or services is remitted to the department on or 21 before the eleventh day of the month in which remittance is due, 22 0.75% of the tax due at a rate of 4% but not to exceed $20,000.00 23 of the tax due for that month may be deducted. If the tax that 24 is due to the state from the purchase of tangible personal prop- 25 erty or services is remitted to the department after the eleventh 26 day and on or before the eighteenth day of the month in which 27 remittance is due, 0.50% of the tax due at a rate of 4% but not 06457'98 3 1 to exceed $15,000.00 of the tax due for that month may be 2 deducted. 3 (3) BEGINNING JANUARY 1, 1999, IN COMPUTING THE AMOUNT OF 4 TAX LEVIED UNDER THIS ACT FOR ANY MONTH, A SELLER WHO COLLECTS 5 THE TAX FROM THE PURCHASER UNDER THIS ACT AND WHO IS SUBJECT TO 6 SECTION 6(3) MAY DEDUCT THE AMOUNT PROVIDED IN THIS SUBSECTION. 7 IF THE TAX THAT IS DUE TO THE STATE FROM THE PURCHASE OF TANGIBLE 8 PERSONAL PROPERTY OR SERVICES IS REMITTED TO THE DEPARTMENT ON OR 9 BEFORE THE SEVENTH DAY OF THE MONTH IN WHICH REMITTANCE IS DUE, 10 0.75% OF THE TAX DUE AT A RATE OF 4% BUT NOT TO EXCEED $20,000.00 11 OF THE TAX DUE FOR THAT MONTH MAY BE DEDUCTED. IF THE TAX THAT 12 IS DUE TO THE STATE FROM THE PURCHASE OF TANGIBLE PERSONAL PROP- 13 ERTY OR SERVICES IS REMITTED TO THE DEPARTMENT AFTER THE SEVENTH 14 DAY AND ON OR BEFORE THE FIFTEENTH DAY OF THE MONTH IN WHICH 15 REMITTANCE IS DUE, 0.50% OF THE TAX DUE AT A RATE OF 4% BUT NOT 16 TO EXCEED $15,000.00 OF THE TAX DUE FOR THAT MONTH MAY BE 17 DEDUCTED. 18 (4)(3)A deduction is not allowed under this section for 19 payments of taxes made to the department after the day the person 20 is required to pay the tax imposed by this act pursuant to sec- 21 tion 6. 22 (5)(4)If, pursuant to section6(3)6(4), the commis- 23 sioner of revenue prescribes the filing of returns and the pay- 24 ment of the tax for periods in excess of 1 month, a seller who 25 collects the tax from the purchaser is entitled to a deduction 26 from the tax collections remitted to the department for the 27 extended payment period that is equivalent to the deduction 06457'98 4 1 allowed under subsection (1),or(2), OR (3) for monthly 2 periods. 3 (6)(5)The commissioner may prescribe the filing of esti- 4 mated returns and annual periodic reconciliations as necessary to 5 carry out the purposes of this section. 6 Sec. 6. (1) Every person storing, using, or consuming tan- 7 gible personal property or services, the storage, use, or con- 8 sumption of which is subject to the tax imposed bytheTHIS act 9 when the tax was not paid to a seller, and every seller collect- 10 ing the tax from the purchaser, unless otherwise prescribed by 11 the department under the provisions of subsection (2),or(3), 12 OR (4), on or before the fifteenth day of each calendar month 13 shall file with the department a return for the preceding calen- 14 dar month, in a form prescribed by the department, showing the 15 price of each purchase of tangible personal property or services 16 during the preceding month, and other information the department 17 considers necessary for the proper administration of this act. 18 At the same time, each person shall pay to the department the 19 amount of tax imposed by this act with respect to the purchases 20 covered by the return. A return shall be signed by the person 21 liable for the tax or his or her duly authorized agent. If the 22 return is prepared by a person other than the taxpayer, the 23 return shall also be signed bytheTHAT person and show his or 24 her address. 25 (2)EachBEFORE JANUARY 1, 1999, EACH seller that had a 26 total tax liability after subtracting the tax payments made to 27 the secretary of state under this act or the GENERAL sales tax 06457'98 5 1 act,Act No. 167 of the Public Acts of 1933, being sections2205.51 to 205.78 of the Michigan Compiled Laws1933 PA 167, MCL 3 205.51 TO 205.78, or after subtracting the tax credits available 4 under section 6a of the general sales tax act,Act No. 167 of5the Public Acts of 1933, being section 205.6a of the Michigan6Compiled Laws1933 PA 167, MCL 205.6A, in the immediately pre- 7 ceding calendar year of$480,000.00 for 1993, $660,000.00 for81994, or$720,000.00for each year after 1994,or more on or 9 before the eighteenth of each month shall remit to the depart- 10 ment, by an electronic funds transfer method approved by the com- 11 missioner of revenue, an amount equal to 95% of the taxpayer's 12 liability under this act for the same month in the immediately 13 preceding calendar year, or 95% of the actual liability for the 14 current month being reported, plus a reconciliation payment equal 15 to the difference between the tax liability determined for the 16 immediately preceding month minus the amount of tax previously 17 paid for that month.However, for the period beginning May 1,181994 through April 30, 1995, the payment required under this sub-19section shall be 140% of the taxpayer's liability under this act20for the same month in the immediately preceding calendar year or2195% of the actual liability for the current month being reported,22plus the reconciliation payment described in this subsection.23 (3) BEGINNING JANUARY 1, 1999, EACH SELLER THAT HAD A TOTAL 24 TAX LIABILITY AFTER SUBTRACTING THE TAX PAYMENTS MADE TO THE SEC- 25 RETARY OF STATE UNDER THIS ACT OR THE GENERAL SALES TAX ACT, 1933 26 PA 167, MCL 205.51 TO 205.78, OR AFTER SUBTRACTING THE TAX 27 CREDITS AVAILABLE UNDER SECTION 6A OF THE GENERAL SALES TAX ACT, 06457'98 6 1 1933 PA 167, MCL 205.56A, IN THE IMMEDIATELY PRECEDING CALENDAR 2 YEAR OF $720,000.00 OR MORE SHALL REMIT TO THE DEPARTMENT, BY AN 3 ELECTRONIC FUNDS TRANSFER METHOD APPROVED BY THE COMMISSIONER OF 4 REVENUE ON OR BEFORE THE FIFTEENTH OF THE IMMEDIATELY FOLLOWING 5 CALENDAR MONTH, AN AMOUNT EQUAL TO 95% OF THE TAXPAYER'S LIABIL- 6 ITY UNDER THIS ACT FOR THE SAME MONTH IN THE IMMEDIATELY PRECED- 7 ING CALENDAR YEAR, OR 95% OF THE ACTUAL LIABILITY FOR THE MONTH 8 BEING REPORTED, PLUS A RECONCILIATION PAYMENT EQUAL TO THE DIF- 9 FERENCE BETWEEN THE TAX LIABILITY DETERMINED FOR THE IMMEDIATELY 10 PRECEDING REMITTANCE MINUS THE AMOUNT OF TAX PREVIOUSLY PAID FOR 11 THAT MONTH. 12 (4)(3) The commissioner of revenue, ifIF considered nec- 13 essary to insure payment of the tax or to provide a more effi- 14 cient administration, THE REVENUE COMMISSIONER may require and 15 prescribe the filing of returns and payment of the tax for other 16 than monthly periods. 17 (5)(4)If a corporation licensed under this act fails for 18 any reason to file the required returns or to pay the tax due, 19 any of its officers having control or supervision of, or charged 20 with the responsibility for, making the returns and paymentsis21 ARE personally liable for the failure. The dissolution of a cor- 22 poration does not discharge an officer's liability for a prior 23 failure of the corporation to make a return or remit the tax 24 due. 25 (6)(5)The tax imposed under this act shall accrue to 26theTHIS state on the last day of each calendar month. 06457'98 Final page. CSC