SB-0546, As Passed Senate, July 1, 2004                                     

SUBSTITUTE FOR

SENATE BILL NO. 546

                                                                             A bill to amend 1937 PA 94, entitled                                              

"Use tax act,"                                                              

by amending sections 3 and 4g (MCL 205.93 and 205.94g), section 3           

as amended by 2003 PA 27 and section 4g as added by 1985 PA 66.             

THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

1       Sec. 3.  (1) There is levied upon and there shall be                        

2   collected from every person in this state a specific tax for the            

3   privilege of using, storing, or consuming tangible personal                 

4   property in this state at a rate equal to 6% of the price of the            

5   property or services specified in section 3a or 3b.  Penalties              

6   and interest shall be added to the tax if applicable as provided            

7   in this act.  For the purpose of the proper administration of               

8   this act and to prevent the evasion of the tax, all of the                  

9   following shall be presumed:                                                

10      (a) That tangible personal property purchased is subject to                 

1   the tax if brought into this state within 90 days of the purchase           

2   date and is considered as acquired for storage, use, or other               

3   consumption in this state.  Beginning April 1, 2003, as used in             

4   this subsection and section 4(1)(a), the term "price" means, with           

5   respect to diesel fuel used by interstate motor carriers in a               

6   qualified commercial motor vehicle, the statewide average retail            

7   price of a gallon of self-serve diesel fuel as determined and               

8   certified quarterly by the department, rounded down to the                  

9   nearest 1/10 of a cent.  This use tax on diesel fuel used by                

10  interstate motor carriers in a qualified commercial motor vehicle           

11  shall be collected under the international fuel tax agreement.              

12      (b) That tangible personal property used solely for personal,               

13  nonbusiness purposes that is purchased outside of this state and            

14  that is not an aircraft is exempt from the tax levied under this            

15  act if 1 or more of the following conditions are satisfied:                 

16                                                                               (i) The property is purchased by a person who is not a                              

17  resident of this state at the time of purchase and is brought               

18  into this state more than 90 days after the date of purchase.               

19      (ii) The property is purchased by a person who is a resident                 

20  of this state at the time of purchase and is brought into this              

21  state more than 360 days after the date of purchase.                        

22      (2) The tax imposed by this section for the privilege of                    

23  using, storing, or consuming a vehicle, ORV, manufactured                   

24  housing, aircraft, snowmobile, or watercraft shall be collected             

25  before the transfer of the vehicle, ORV, manufactured housing,              

26  aircraft, snowmobile, or watercraft, except a transfer to a                 

27  licensed dealer or retailer for purposes of resale that arises by           

1   reason of a transaction made by a person who does not transfer              

2   vehicles, ORVs, manufactured housing, aircraft, snowmobiles, or             

3   watercraft in the ordinary course of his or her business done in            

4   this state.  The tax on a vehicle, ORV, snowmobile, and                     

5   watercraft shall be collected by the secretary of state before              

6   the transfer of the vehicle, ORV, snowmobile, or watercraft                 

7   registration.  The tax on manufactured housing shall be collected           

8   by the department of consumer and industry services,  mobile                

9   home manufactured housing commission, or its agent before the              

10  transfer of the certificate of title.  The tax on an aircraft               

11  shall be collected by the department of treasury.                           

12  Notwithstanding any limitation contained in section 2 and except            

13  as provided in this subsection, the price tax base of any                   

14  vehicle, ORV, manufactured housing, aircraft, snowmobile, or                

15  watercraft subject to taxation under this act shall be not less             

16  than its retail dollar value at the time of acquisition as fixed            

17  pursuant to rules promulgated by the department.  However, the              

18  price tax base of an aircraft that would otherwise qualify for              

19  the presumption under subsection (1)(b) if it were other tangible           

20  personal property shall be its retail value at the time it                  

21  becomes taxable in this state.  The price tax base of a new or              

22  previously owned car or truck held for resale by a dealer and               

23  that is not exempt under section 4(1)(c) is the purchase price of           

24  the car or truck multiplied by 2.5% plus $30.00 per month                   

25  beginning with the month that the dealer uses the car or truck in           

26  a nonexempt manner.                                                         

27      (3) The following transfers or purchases are not subject to                 

1   use tax:                                                                    

2       (a) A transaction or a portion of a transaction if the                      

3   transferee or purchaser is the spouse, mother, father, brother,             

4   sister, child, stepparent, stepchild, stepbrother, stepsister,              

5   grandparent, grandchild, legal ward, or  a  legally appointed               

6   guardian with a certified letter of guardianship, of the                    

7   transferor.                                                                 

8       (b) A transaction or a portion of a transaction if the                      

9   transfer is a gift to a beneficiary in the administration of an             

10  estate.                                                                     

11      (c) If a vehicle, ORV, manufactured housing, aircraft,                      

12  snowmobile, or watercraft that has once been subjected to the               

13  Michigan sales or use tax is transferred in connection with the             

14  organization, reorganization, dissolution, or partial liquidation           

15  of an incorporated or unincorporated business and the beneficial            

16  ownership is not changed.                                                   

17      (d) If an insurance company licensed to conduct business in                 

18  this state acquires ownership of a late model distressed vehicle            

19  as defined in section 12a of the Michigan vehicle code, 1949                

20  PA 300, MCL 257.12a, through payment of damages in response to a            

21  claim or when the person who owned the vehicle before the                   

22  insurance company reacquires ownership from the company as part             

23  of the settlement of a claim.                                               

24      (4) The department may utilize the services, information, or                

25  records of any other department or agency of state government in            

26  the performance of its duties under this act, and other                     

27  departments or agencies of state government are required to                 

1   furnish those services, information, or records upon the request            

2   of the department.                                                          

3       Sec. 4g.  (1) The tax levied  shall does not apply to                      

4   property purchased from a seller or transferor if the property is           

5   part of the purchase or transfer of a business.                             

6       (2) The exemption provided by this section  shall does not                 

7   apply to all of the following:                                              

8       (a) The purchase or transfer of tangible personal property                  

9   that is stock-in-trade or other property of a kind  which that

10  would properly be included in the inventory of the seller or                

11  transferor if on hand at the close of the seller's or                       

12  transferor's tax period or property held by the seller or                   

13  transferor for sale to customers in the ordinary course of its              

14  trade or business.                                                          

15      (b) The purchase or transfer of a motor vehicle, ORV,  mobile               

16  home manufactured housing, aircraft, snowmobile, or watercraft.            

17      (3) As used in this section, "purchase or transfer of a                     

18  business" means 1 or more of the following:                                 

19      (a) The purchaser or transferee has acquired and intends to                 

20  use the seller's or transferor's trade name or good will.                   

21      (b) The purchaser or transferee intends to continue all or                  

22  part of the business of the seller or transferor at the same                

23  location or at another location.                                            

24      (c) The purchaser or transferee acquired at least 75% of the                

25  seller's or transferor's tangible personal property at 1 or more            

26  of the seller's or transferor's business locations.                         

27      Enacting section 1.  This amendatory act does not take                      

1   effect unless Senate Bill No. _____ or House Bill No. _____                 

2   (request no. 01316'03) of the 92nd Legislature is enacted into              

3   law.