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SENATE BILL NO. 997
A bill to amend 1933 PA 167, entitled
"General sales tax act,"
by amending section 1 (MCL 205.51), as amended by 2023 PA 20.
THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
Sec. 1. (1) As used in this act: 1
(a) "Person" means an individual, firm, partnership, joint 2
venture, association, social club, fraternal organization, 3
municipal or private corporation whether or not organized for 4
profit, or not, company, limited liability company, estate, trust, 5
receiver, trustee, syndicate, the United States, this state, 6
county, or any other group or combination acting as a unit, and 7
May 21, 2026, Introduced by Senators LINDSEY, DALEY, BELLINO, MCBROOM,
HUIZENGA, HAUCK, WEBBER, RUNESTAD, VICTORY, DAMOOSE, OUTMAN,
HOITENGA and BAYER and referred to Committee on Finance, Insurance, and Consumer
Protection.
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includes the plural as well as the singular number, unless the 1
intention to give a more limited meaning is disclosed by the 2
context. 3
(b) "Sale at retail" or "retail sale" means a sale, lease, or 4
rental of tangible personal property for any purpose other than for 5
resale, sublease, or subrent. 6
(c) "Gross proceeds" means sales price. 7
(d) "Sales price" means the total amount of consideration, 8
including cash, credit, property, and services, for which tangible 9
personal property or services are sold, leased, or rented, valued 10
in money, whether received in money or otherwise, and applies to 11
the measure subject to sales tax. Sales price includes the 12
following subparagraphs (i) to (vii) and excludes subparagraphs (viii) 13
to (xv):(xiv): 14
(i) Seller's cost of the property sold. 15
(ii) Cost of materials used, labor or service cost, interest, 16
losses, costs of transportation to the seller, taxes imposed on the 17
seller other than taxes imposed by this act, and any other expense 18
of the seller. 19
(iii) Charges by the seller for any services necessary to 20
complete the sale, other than the following: 21
(A) An amount received or billed by the taxpayer for 22
remittance to the employee as a gratuity or tip, if the gratuity or 23
tip is separately identified and itemized on the guest check or 24
billed to the customer. 25
(B) Labor or service charges involved in maintenance and 26
repair work on tangible personal property of others if separately 27
itemized. 28
(iv) Except as otherwise provided in subparagraph (xv), (xiv), 29
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delivery charges. A seller is not liable under this act for 1
delivery charges allocated to the delivery of exempt property. 2
(v) Except as otherwise provided in subparagraph (xv), (xiv), 3
installation charges. 4
(vi) Except as otherwise provided in subparagraphs (xi) , and 5
(xii), and (xiv), credit for any trade-in. 6
(vii) Except as otherwise provided in subparagraph (x), 7
consideration received by the seller from third parties if all of 8
the following conditions are met: 9
(A) The seller actually receives consideration from a party 10
other than the purchaser and the consideration is directly related 11
to a price reduction or discount on the sale. 12
(B) The seller has an obligation to pass the price reduction 13
or discount through to the purchaser. 14
(C) The amount of the consideration attributable to the sale 15
is fixed and determinable by the seller at the time of the sale of 16
the item to the purchaser. 17
(D) One of the following criteria is met: 18
(I) The purchaser presents a coupon, certificate, or other 19
documentation to the seller to claim a price reduction or discount 20
where the coupon, certificate, or documentation is authorized, 21
distributed, or granted by a third party with the understanding 22
that the third party will reimburse any seller to whom the coupon, 23
certificate, or documentation is presented. 24
(II) The purchaser identifies himself or herself to the seller 25
as a member of a group or organization entitled to a price 26
reduction or discount. A preferred customer card that is available 27
to any patron does not constitute membership in a group or 28
organization. 29
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(III) The price reduction or discount is identified as a third 1
party price reduction or discount on the invoice received by the 2
purchaser or on a coupon, certificate, or other documentation 3
presented by the purchaser. 4
(viii) Interest, financing, or carrying charges from credit 5
extended on the sale of personal property or services, if the 6
amount is separately stated on the invoice, bill of sale, or 7
similar document given to the purchaser. 8
(ix) Any taxes legally imposed directly on the consumer that 9
are separately stated on the invoice, bill of sale, or similar 10
document given to the purchaser. 11
(x) Beginning January 1, 2000, employee discounts that are 12
reimbursed by a third party on sales of motor vehicles. 13
(xi) Beginning November 15, 2013, credit for the agreed-upon 14
value of a titled watercraft used as part payment of the purchase 15
price of a new titled watercraft or used titled watercraft 16
purchased from a watercraft dealer if the agreed-upon value is 17
separately stated on the invoice, bill of sale, or similar document 18
given to the purchaser. This subparagraph does not apply to leases 19
or rentals. 20
(xii) Beginning December 15, 2013, on the effective date of the 21
amendatory act that deleted former sub-subparagraphs (A) to (E), 22
credit for the agreed-upon value of a motor vehicle or recreational 23
vehicle used as part payment of the purchase price of a new motor 24
vehicle or used motor vehicle or recreational vehicle purchased 25
from a dealer if the agreed-upon value is separately stated on the 26
invoice, bill of sale, or similar document given to the purchaser. 27
This subparagraph does not apply to leases or rentals. Except as 28
otherwise provided under subparagraph (xiv), for purposes of this 29
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subparagraph, the agreed-upon value of a motor vehicle or 1
recreational vehicle used as part payment is limited as follows: 2
(A) Beginning December 15, 2013, subject to sub-subparagraphs 3
(B) and (C), the lesser of the following: 4
(I) $2,000.00. 5
(II) The agreed-upon value of the motor vehicle or 6
recreational vehicle used as part payment. 7
(B) Beginning January 1, 2015 and each January 1 thereafter 8
through December 31, 2018, the amount under sub-subparagraph (A)(I) 9
is increased by an additional $500.00 each year. 10
(C) Beginning January 1, 2019, subject to sub-subparagraphs 11
(D) and (E), the lesser of the following: 12
(I) $5,000.00. 13
(II) The agreed-upon value of the motor vehicle used as part 14
payment. 15
(D) Beginning January 1, 2020 and each January 1 thereafter, 16
the amount under sub-subparagraph (C)(I) is increased by an 17
additional $1,000.00 each year. 18
(E) Beginning on January 1 in the year in which the amount 19
under sub-subparagraph (C)(I) exceeds $14,000.00 and each January 1 20
thereafter, there is no limitation on the agreed-upon value of the 21
motor vehicle used as part payment. 22
(xiii) Beginning January 1, 2017, credit for the core charge 23
attributable to a recycling fee, deposit, or disposal fee for a 24
motor vehicle or recreational vehicle part or battery if the 25
recycling fee, deposit, or disposal fee is separately stated on the 26
invoice, bill of sale, or similar document given to the purchaser. 27
(xiv) Beginning January 1, 2018, credit for the agreed-upon 28
value of a recreational vehicle used as part payment of the 29
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purchase price of a recreational vehicle purchased from a dealer if 1
the agreed-upon value is separately stated on the invoice, bill of 2
sale, or similar document given to the purchaser. This subparagraph 3
does not apply to leases or rentals. 4
(xiv) (xv) Delivery or installation charges if such charges are 5
separately stated on the invoice, bill of sale, or similar document 6
provided to the purchaser, and the seller maintains its books and 7
records to show separately the transactions used to determine the 8
tax levied by this act. This subdivision does not apply to delivery 9
or installation charges involving or relating to the sale of 10
electricity, natural gas, or artificial gas by a utility. 11
(e) "Business" includes an activity engaged in by a person or 12
caused to be engaged in by that person with the object of gain, 13
benefit, or advantage, either direct or indirect. 14
(f) "Tax year" or "taxable year" means the fiscal year of the 15
state or the taxpayer's fiscal year if permission is obtained by 16
the taxpayer from the department to use the taxpayer's fiscal year 17
as the tax period instead. 18
(g) "Department" means the department of treasury. 19
(h) "Taxpayer" means a person subject to a tax under this act. 20
(i) "Tax" includes a tax, interest, or penalty levied under 21
this act. 22
(j) "Textiles" means goods that are made of or incorporate 23
woven or nonwoven fabric, including, but not limited to, clothing, 24
shoes, hats, gloves, handkerchiefs, curtains, towels, sheets, 25
pillows, pillow cases, pillowcases, tablecloths, napkins, aprons, 26
linens, floor mops, floor mats, and thread. Textiles also include 27
materials used to repair or construct textiles, or other goods used 28
in the rental, sale, or cleaning of textiles. 29
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(k) "New motor vehicle" means that term as defined in section 1
33a of the Michigan vehicle code, 1949 PA 300, MCL 257.33a. 2
(l) "Recreational vehicle" means that term as defined in 3
section 49a of the Michigan vehicle code, 1949 PA 300, MCL 257.49a. 4
(m) "Dealer" means that term as defined in section 11 of the 5
Michigan vehicle code, 1949 PA 300, MCL 257.11. 6
(n) "Watercraft dealer" means a dealer as that term is defined 7
in section 80102 of the natural resources and environmental 8
protection act, 1994 PA 451, MCL 324.80102. 9
(o) "Utility" means either of the following: 10
(i) A person regulated by the Michigan public service 11
commission as a utility. 12
(ii) A person that operates equipment or facilities for 13
producing, generating, transmitting, delivering, or furnishing 14
electricity within this state for the public for compensation, 15
regardless of the person's owner, ownership structure, or 16
regulation by the Michigan public service commission. 17
(2) If the department determines that it is necessary for the 18
efficient administration of this act to regard an unlicensed 19
person, including a salesperson, representative, peddler, or 20
canvasser as the agent of the dealer, distributor, supervisor, or 21
employer under whom the unlicensed person operates or from whom the 22
unlicensed person obtains the tangible personal property sold by 23
the unlicensed person, irrespective of whether the unlicensed 24
person is making sales on the unlicensed person's own behalf or on 25
behalf of the dealer, distributor, supervisor, or employer, the 26
department may so regard the unlicensed person and may regard the 27
dealer, distributor, supervisor, or employer as making sales at 28
retail at the retail price for the purposes of this act. 29
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(3) Notwithstanding anything to the contrary in this act, the 1
following applies only to delivery and installation charges 2
described in subsection (1)(d)(iv) or (v), except that this 3
subsection does not apply to delivery and installation charges 4
involving or relating to the sale of electricity, natural gas, or 5
artificial gas by a utility: 6
(a) Not later than 90 days after the effective date of the 7
amendatory act that added this subsection, July 25, 2023, the 8
department shall cancel all outstanding balances related to such 9
delivery and installation charges on notices of intent to assess 10
that were issued under section 21 of 1941 PA 122, MCL 205.21, for 11
the tax levied under this act and that were issued before the 12
effective date of the amendatory act that added this 13
subsection.April 26, 2023. 14
(b) Not later than 90 days after the effective date of the 15
amendatory act that added this subsection, July 25, 2023, the 16
department shall cancel all outstanding balances related to such 17
delivery and installation charges on final assessments that were 18
issued under section 22 of 1941 PA 122, MCL 205.22, for the tax 19
levied under this act, and that were issued before the effective 20
date of the amendatory act that added this subsection.April 26, 21
2023. 22
(c) After the effective date of the amendatory act that added 23
this subsection, Beginning April 26, 2023, the department shall not 24
issue any new assessments for the tax levied under this act on such 25
delivery and installation charges for any tax period before the 26
effective date of the amendatory act that added this subsection 27
April 26, 2023, that is open under the statute of limitations 28
provided in section 27a of 1941 PA 122, MCL 205.27a. 29
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Final Page
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Enacting section 1. This amendatory act does not take effect 1
unless Senate Bill No. 998 of the 103rd Legislature is enacted into 2
law. 3