HB-5244, As Passed Senate, February 12, 2004                                

SENATE SUBSTITUTE FOR

HOUSE BILL NO. 5244

                                                                             A bill to amend 1893 PA 206, entitled                                             

"The general property tax act,"                                             

by amending section 9b (MCL 211.9b), as amended by 2003 PA 274.             

THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

1       Sec. 9b.  (1) A special tool is exempt from the collection                  

2   of taxes under this act.                                                    

3       (2)  A person claiming an exemption under this section shall                

4   include in the statement required under section 19 any special              

5   tool for which an exemption is claimed, indicating that the                 

6   special tool is exempt under this section. The statement                   

7   required under section 19 may provide for a separate line for               

8   providing the aggregate total original cost of excluded exempt              

9   special tools.

10      (3) As used in this section:                                                

11      (a) "Product" means an item of tangible property that is                    

1   directly created or produced through the manufacturing process.             

2   A product may be any of the following items:                                

3                                                                                (i) A part.                                                                         

4       (ii) A special tool.                                                         

5       (iii) A component.                                                           

6       (iv) A sub-assembly.                                                         

7       (v) Completed goods that are available for sale or lease in                 

8   wholesale or retail trade.                                                  

9       (b) "Special tool" means a finished or unfinished device such               

10  as a die, jig, fixture, mold, pattern, special gauge, or similar            

11  device, that is used, or is being prepared for use, to                      

12  manufacture a product and that cannot be used to manufacture                

13  another product without substantial modification of the device.             

14  The length of the economic life of the product manufactured shall           

15  not be considered in making a determination whether a device used           

16  to manufacture that product is a special tool.  Special tools do            

17  not include the following:                                                  

18                                                                               (i) A device that differs in character from dies, jigs,                             

19  fixtures, molds, patterns, or special gauges.                               

20      (ii) Standard tools.                                                         

21      (iii) Machinery or equipment, even if customized, and even if                

22  used in conjunction with special tools.                                     

23      (c) "Standard tool" means a die, jig, fixture, mold, pattern,               

24  gauge, or other tool that is not a special tool.  Standard tool             

25  does not include machinery or equipment, even if customized, and            

26  even if used in conjunction with special tools or standard                  

27  tools.                                                                      

1       Enacting section 1.  This amendatory act is retroactive and                 

2   is effective December 31, 2003.