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SENATE BILL NO. 998
A bill to amend 1937 PA 94, entitled
"Use tax act,"
by amending section 2 (MCL 205.92), as amended by 2023 PA 94.
THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
Sec. 2. (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, 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) "Use" means the exercise of a right or power over tangible 4
personal property incident to the ownership of that property 5
including transfer of the property in a transaction where 6
possession is given. Converting tangible personal property acquired 7
for a use exempt from the tax levied under this act to a use not 8
exempt from the tax levied under this act is a taxable use. 9
(c) "Storage" means a keeping or retention of property in this 10
state for any purpose after the property loses its interstate 11
character. 12
(d) "Seller" means the person from whom a purchase is made and 13
includes every person selling tangible personal property or 14
services for storage, use, or other consumption in this state. If, 15
in the opinion of the department, it is necessary for the efficient 16
administration of this act to regard a salesperson, representative, 17
peddler, or canvasser as the agent of a dealer, distributor, 18
supervisor, or employer under whom the person operates or from whom 19
the person obtains tangible personal property or services sold by 20
the person for storage, use, or other consumption in this state, 21
irrespective of whether or not the person is making the sales on 22
the person's own behalf or on behalf of the dealer, distributor, 23
supervisor, or employer, the department may so consider the person, 24
and may consider the dealer, distributor, supervisor, or employer 25
as the seller for the purpose of this act. 26
(e) "Purchase" means to acquire for a consideration, whether 27
the acquisition is effected by a transfer of title, of possession, 28
or of both, or a license to use or consume; whether the transfer is 29
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absolute or conditional, and by whatever means the transfer is 1
effected; and whether consideration is a price or rental in money, 2
or by way of exchange or barter. Purchase includes converting 3
tangible personal property acquired for a use exempt from the tax 4
levied under this act to a use not exempt from the tax levied under 5
this act. 6
(f) "Purchase price" or "price" means the total amount of 7
consideration paid by the consumer to the seller, including cash, 8
credit, property, and services, for which tangible personal 9
property or services are sold, leased, or rented, valued in money, 10
whether received in money or otherwise, and applies to the measure 11
subject to use tax. Purchase price includes the following 12
subparagraphs (i) to (vii) and excludes subparagraphs (viii) to 13
(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 taxpayer 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
(g) "Consumer" means the person who has purchased tangible 12
personal property or services for storage, use, or other 13
consumption in this state and includes, but is not limited to, 1 or 14
more of the following: 15
(i) A person acquiring tangible personal property if engaged in 16
the business of constructing, altering, repairing, or improving the 17
real estate of others. 18
(ii) A person who has converted tangible personal property or 19
services acquired for storage, use, or consumption in this state 20
that is exempt from the tax levied under this act to storage, use, 21
or consumption in this state that is not exempt from the tax levied 22
under this act. 23
(h) "Business" means all activities engaged in by a person or 24
caused to be engaged in by a person with the object of gain, 25
benefit, or advantage, either direct or indirect. 26
(i) "Department" means the department of treasury. 27
(j) "Tax" includes all taxes, interest, or penalties levied 28
under this act. 29
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(k) "Tangible personal property" means personal property that 1
can be seen, weighed, measured, felt, or touched or that is in any 2
other manner perceptible to the senses and includes electricity, 3
water, gas, steam, and prewritten computer software. 4
(l) "Textiles" means goods that are made of or incorporate 5
woven or nonwoven fabric, including, but not limited to, clothing, 6
shoes, hats, gloves, handkerchiefs, curtains, towels, sheets, 7
pillows, pillowcases, tablecloths, napkins, aprons, linens, floor 8
mops, floor mats, and thread. Textiles also include materials used 9
to repair or construct textiles, or other goods used in the rental, 10
sale, or cleaning of textiles. 11
(m) "Interstate motor carrier" means a person who operates or 12
causes to be operated a qualified commercial motor vehicle on a 13
public road or highway in this state and at least 1 other state or 14
Canadian province. 15
(n) "Qualified commercial motor vehicle" means that term as 16
defined in section 1(l), (m), and (n) of the motor carrier fuel tax 17
act, 1980 PA 119, MCL 207.211. 18
(o) "Diesel fuel" means that term as defined in section 2(q) 19
of the motor fuel tax act, 2000 PA 403, MCL 207.1002. 20
(p) "Sale" means a transaction by which tangible personal 21
property or services are purchased or rented for storage, use, or 22
other consumption in this state. 23
(q) "Convert" means putting a service or tangible personal 24
property acquired for a use exempt from the tax levied under this 25
act at the time of acquisition to a use that is not exempt from the 26
tax levied under this act, whether the use is in whole or in part, 27
or permanent or not permanent. A motor vehicle purchased for resale 28
by a new vehicle dealer licensed under section 248(8)(a) of the 29
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Michigan vehicle code, 1949 PA 300, MCL 257.248, and not registered 1
in the name of the dealer is not considered to be converted before 2
sale or lease by that dealer. 3
(r) "New motor vehicle" means that term as defined in section 4
33a of the Michigan vehicle code, 1949 PA 300, MCL 257.33a. 5
(s) "Recreational vehicle" means that term as defined in 6
section 49a of the Michigan vehicle code, 1949 PA 300, MCL 257.49a. 7
(t) "Dealer" means that term as defined in section 11 of the 8
Michigan vehicle code, 1949 PA 300, MCL 257.11. 9
(u) "Watercraft dealer" means a dealer as that term is defined 10
in section 80102 of the natural resources and environmental 11
protection act, 1994 PA 451, MCL 324.80102. 12
(v) "Utility" means either of the following: 13
(i) A person regulated by the Michigan public service 14
commission as a utility. 15
(ii) A person that operates equipment or facilities for 16
producing, generating, transmitting, delivering, or furnishing 17
electricity within this state for the public for compensation, 18
regardless of the person's owner, ownership structure, or 19
regulation by the Michigan public service commission. 20
(2) Notwithstanding anything to the contrary in this act, the 21
following applies only to delivery and installation charges 22
described in subsection (1)(f)(iv) or (v), except that this 23
subsection does not apply to delivery and installation charges 24
involving or relating to the sale of electricity, natural gas, or 25
artificial gas by a utility: 26
(a) Not later than July 25, 2023, the department shall cancel 27
all outstanding balances related to such delivery and installation 28
charges on notices of intent to assess that were issued under 29
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Final Page
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section 21 of 1941 PA 122, MCL 205.21, for the tax levied under 1
this act and that were issued before April 26, 2023. 2
(b) Not later than July 25, 2023, the department shall cancel 3
all outstanding balances related to such delivery and installation 4
charges on final assessments that were issued under section 22 of 5
1941 PA 122, MCL 205.22, for the tax levied under this act, and 6
that were issued before April 26, 2023. 7
(c) Beginning April 26, 2023, the department shall not issue 8
any new assessments for the tax levied under this act on such 9
delivery and installation charges for any tax period before April 10
26, 2023, that is open under the statute of limitations provided in 11
section 27a of 1941 PA 122, MCL 205.27a. 12
Enacting section 1. This amendatory act does not take effect 13
unless Senate Bill No. 997 of the 103rd Legislature is enacted into 14
law. 15