SENATE BILL No. 415

 

 

April 29, 2003, Introduced by Senator EMERSON and referred to the Committee on Finance.

 

 

        

                                                                                

                                                                                

                                                                                

                                                                                

                                                                                

                                                                                

                                                                                

                                                                                

                                                                                

                                                                                

                                                                                

                                                                                

                                                                                

                                                                                

                                                                                

                                                                                

                                                                                

                                                                                

                                                                                

                                                                                

                                                                                

                                                                                

                                                                                

                                                                                 A bill to amend 1941 PA 122, entitled                                             

                                                                                

    "An act to establish the revenue collection duties of the                   

    department of treasury; to prescribe its powers and duties as the           

    revenue collection agency of the state; to prescribe certain                

    powers and duties of the state treasurer; to regulate the                   

    importation, stamping, and disposition of certain tobacco                   

    products; to provide for the transfer of powers and duties now              

    vested in certain other state boards, commissions, departments              

    and offices; to prescribe certain duties of and require certain             

    reports from the department of treasury; to provide procedures              

    for the payment, administration, audit, assessment, levy of                 

    interests or penalties on, and appeals of taxes and tax                     

    liability; to prescribe its powers and duties if an agreement to            

    act as agent for a city to administer, collect, and enforce the             

    city income tax act on behalf of a city is entered into with any            

    city; to provide an appropriation; to abolish the state board of            

    tax administration; to prescribe penalties and provide remedies;            

    and to declare the effect of this act,"                                     

                                                                                

    (MCL 205.1 to 205.31) by adding section 30d.                                

                                                                                

                THE PEOPLE OF THE STATE OF MICHIGAN ENACT:                      

                                                                                

1       Sec. 30d.  (1) Notwithstanding its form of business                         

                                                                                

2   organization or the existence of an agency relationship or lack             

                                                                                

3   of an agency relationship, a person subject to a tax administered           

                                                                                


                                                                                

1   under this act and an out-of-state affiliate of that person that            

                                                                                

2   meet 1 or more of the following criteria are jointly and                    

                                                                                

3   severally liable for any tax administered under this act:                   

                                                                                

4       (a) The person and the out-of-state affiliate of that person                

                                                                                

5   use an identical or substantially similar name, trade name,                 

                                                                                

6   trademark, or goodwill to develop, promote, or maintain sales.              

                                                                                

7       (b) The person and the out-of-state affiliate of that person                

                                                                                

8   pay for each other's services in whole or in part contingent upon           

                                                                                

9   the volume or value of sales.                                               

                                                                                

10      (c) The person and the out-of-state affiliate of that person                

                                                                                

11  share or exchange value in the operation of their businesses.               

                                                                                

12      (d) The person and the out-of-state affiliate of that person                

                                                                                

13  substantially coordinate common business plans.                             

                                                                                

14      (2) Notwithstanding its form of business organization or the                

                                                                                

15  existence of an agency relationship or lack of an agency                    

                                                                                

16  relationship, an out-of-state affiliate of a person subject to a            

                                                                                

17  tax administered under this act has substantial nexus with this             

                                                                                

18  state for any tax administered under this act if the out-of-state           

                                                                                

19  affiliate meets 1 or more of the criteria in subsection (1).                

                                                                                

20      (3) As used in this section, "out-of-state affiliate of a                   

                                                                                

21  person subject to a tax administered under this act" means any              

                                                                                

22  out-of-state person who directly, indirectly, or constructively             

                                                                                

23  owns or controls, is owned or controlled by, or is under common             

                                                                                

24  ownership or control with a person subject to a tax administered            

                                                                                

25  under this act.                                                             

                                                                                

26      (4) Nothing in this section shall be interpreted to limit the               

                                                                                

27  taxing jurisdiction of this state under the constitution of the             


                                                                                

1   United States.                                                              

                                                                                

2       (5) This section applies for taxes collected under the use                  

                                                                                

3   tax act, 1937 PA 94, MCL 205.91 to 205.111, beginning October 1,            

                                                                                

4   2003.                                                                       

                                                                                

5       (6) This section applies for tax years that begin on or after               

                                                                                

6   January 1, 2004 for taxes administered under this act, other than           

                                                                                

7   taxes collected under the use tax act, 1937 PA 94, MCL 205.91 to            

                                                                                

8   205.111.