December 12, 2007, Introduced by Reps. Condino and Bieda and referred to the Committee on Tax Policy.
A bill to amend 1933 PA 167, entitled
"General sales tax act,"
by amending sections 1, 1a, 4g, 4k, 4bb, 12, 18, and 21 (MCL
205.51, 205.51a, 205.54g, 205.54k, 205.54bb, 205.62, 205.68, and
205.71), sections 1, 4g, and 4k as amended by and sections 12, 18,
and 21 as added by 2004 PA 173, section 1a as amended by 2006 PA
434, and section 4bb as added by 2004 PA 301; and to repeal acts
and parts of acts.
THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
Sec. 1. (1) As used in this act:
(a) "Person" means an individual, firm, partnership, joint
venture, association, social club, fraternal organization,
municipal or private corporation whether organized for profit or
not, company, estate, trust, receiver, trustee, syndicate, the
United States, this state, county, or any other group or
combination acting as a unit, and includes the plural as well as
the singular number, unless the intention to give a more limited
meaning is disclosed by the context.
(b) "Sale at retail" or "retail sale" means a sale, lease, or
rental of tangible personal property for any purpose other than for
resale, sublease, or subrent.
(c) "Gross proceeds" means sales price.
(d) "Sales price" means the total amount of consideration,
including cash, credit, property, and services, for which tangible
personal property or services are sold, leased, or rented, valued
in money, whether received in money or otherwise, and applies to
the measure subject to sales tax. Sales price includes the
following
subparagraphs (i) through (vi) (vii) and excludes
subparagraphs
(vii) (viii) through
(viii) (ix):
(i) Seller's cost of the property sold.
(ii) Cost of materials used, labor or service cost, interest,
losses, costs of transportation to the seller, taxes imposed on the
seller other than taxes imposed by this act, and any other expense
of the seller.
(iii) Charges by the seller for any services necessary to
complete the sale, other than the following:
(A) An amount received or billed by the taxpayer for
remittance to the employee as a gratuity or tip, if the gratuity or
tip is separately identified and itemized on the guest check or
billed to the customer.
(B) Labor or service charges involved in maintenance and
repair work on tangible personal property of others if separately
itemized.
(iv) Delivery charges incurred or to be incurred before the
completion of the transfer of ownership of tangible personal
property subject to the tax levied under this act from the seller
to the purchaser. A seller is not liable under this act for
delivery charges allocated to the delivery of exempt property.
(v) Installation charges incurred or to be incurred before the
completion of the transfer of ownership of tangible personal
property from the seller to the purchaser.
(vi) Credit for any trade-in.
(vii) Consideration received by the seller from third parties
if all of the following conditions are met:
(A) The seller actually receives consideration from a party
other than the purchaser and the consideration is directly related
to a price reduction or discount on the sale.
(B) The seller has an obligation to pass the price reduction
or discount through to the purchaser.
(C) The amount of the consideration attributable to the sale
is fixed and determinable by the seller at the time of the sale of
the item to the purchaser.
(D) One of the following criteria is met:
(I) The purchaser presents a coupon, certificate, or other
documentation to the seller to claim a price reduction or discount
where the coupon, certificate, or documentation is authorized,
distributed, or granted by a third party with the understanding
that the third party will reimburse any seller to whom the coupon,
certificate, or documentation is presented.
(II) The purchaser identifies himself or herself to the seller
as a member of a group or organization entitled to a price
reduction or discount. A preferred customer card that is available
to any patron does not constitute membership in a group or
organization.
(III) The price reduction or discount is identified as a third
party price reduction or discount on the invoice received by the
purchaser or on a coupon, certificate, or other documentation
presented by the purchaser.
(viii) (vii) Interest,
financing, or carrying charges from credit
extended on the sale of personal property or services, if the
amount is separately stated on the invoice, bill of sale, or
similar document given to the purchaser.
(ix) (viii) Any
taxes legally imposed directly on the consumer
that are separately stated on the invoice, bill of sale, or similar
document given to the purchaser.
(e) "Business" includes an activity engaged in by a person or
caused to be engaged in by that person with the object of gain,
benefit, or advantage, either direct or indirect.
(f) "Tax year" or "taxable year" means the fiscal year of the
state or the taxpayer's fiscal year if permission is obtained by
the taxpayer from the department to use the taxpayer's fiscal year
as the tax period instead.
(g) "Department" means the department of treasury.
(h) "Taxpayer" means a person subject to a tax under this act.
(i) "Tax" includes a tax, interest, or penalty levied under
this act.
(j) "Textiles" means goods that are made of or incorporate
woven or nonwoven fabric, including, but not limited to, clothing,
shoes, hats, gloves, handkerchiefs, curtains, towels, sheets,
pillows, pillow cases, tablecloths, napkins, aprons, linens, floor
mops, floor mats, and thread. Textiles also include materials used
to repair or construct textiles, or other goods used in the rental,
sale, or cleaning of textiles.
(2) If the department determines that it is necessary for the
efficient administration of this act to regard an unlicensed
person, including a salesperson, representative, peddler, or
canvasser as the agent of the dealer, distributor, supervisor, or
employer under whom the unlicensed person operates or from whom the
unlicensed person obtains the tangible personal property sold by
the unlicensed person, irrespective of whether the unlicensed
person is making sales on the unlicensed person's own behalf or on
behalf of the dealer, distributor, supervisor, or employer, the
department may so regard the unlicensed person and may regard the
dealer, distributor, supervisor, or employer as making sales at
retail at the retail price for the purposes of this act.
Sec. 1a. As used in this act:
(a) "Alcoholic beverage" means a beverage suitable for human
consumption that contains 1/2 of 1% or more of alcohol by volume.
(b) "Bundled transaction" means the retail sale of 2 or more
distinct and identifiable products, except real property and
services to real property, where the products are sold for a single
nonitemized price. A bundled transaction does not include the sale
of any products in which the sales price varies, or is negotiable,
based on the selection by the purchaser of the products included in
the transaction. As used in this subdivision:
(i) "Distinct and identifiable products" does not include any
of the following:
(A) Packaging, such as containers, boxes, sacks, bags, and
bottles or other materials such as wrapping, labels, tags, and
instruction guides, that accompany the retail sale of the products
and are incidental or immaterial to the retail sale of the
products, including grocery sacks, shoeboxes, dry cleaning garment
bags, and express delivery envelopes and boxes.
(B) A product provided free of charge with the required
purchase of another product. A product is provided free of charge
if the sales price of the product purchased does not vary depending
on the inclusion of the product provided free of charge.
(C) Items included in the sales price.
(ii) "Purchase price" means the price paid by the seller for
the property.
(iii) "Single nonitemized price" does not include a price that
is separately identified by product on binding sales or other
supporting sales-related documentation made available to the
purchaser in paper or electronic form, including, but not limited
to, an invoice, bill of sale, receipt, contract, service agreement,
lease agreement, periodic notice of rates and services, rate card,
or price list.
(iv) Bundled transaction does not include any of the following:
(A) The retail sale of tangible personal property and a
service if the tangible personal property is essential to the use
of the service and is provided exclusively in connection with the
service and the true object of the transaction is the service.
(B) The retail sale of services if 1 service is provided that
is essential to the use or receipt of a second service and the
first service is provided exclusively in connection with the second
service and the true object of the transaction is the second
service.
(C) A transaction that includes taxable and nontaxable
products and the purchase price or sales price of the taxable
products is de minimis. As used in this sub-subparagraph, "de
minimis" means the seller's purchase price or sales price of the
taxable products is 10% or less of the total purchase price or
sales price of the products. A seller shall use either the purchase
price or sales price of the products to determine if the taxable
products are de minimis. Sellers may not use a combination of the
purchase price and sales price of the products to determine if the
taxable products are de minimis. A seller shall use the full term
of a service contract to determine if the taxable products are de
minimis.
(D) The retail sale of exempt tangible personal property and
taxable tangible personal property if all of the following
conditions are satisfied:
(I) The transaction includes food and food ingredients,
prescription or over-the-counter drugs, durable medical equipment,
mobility enhancing equipment, medical supplies, or prosthetic
devices.
(II) The seller's purchase price or sales price of the taxable
tangible personal property is 50% or less of the total purchase
price or sales price of the bundled tangible personal property. A
seller may not use a combination of the purchase price and sales
price of the tangible personal property when making the 50%
determination for a transaction.
(c) (b)
"Computer" means an
electronic device that accepts
information in digital or similar form and manipulates it for a
result based on a sequence of instructions.
(d) (c)
"Computer software" means
a set of coded instructions
designed to cause a computer or automatic data processing equipment
to perform a task.
(e) (d)
"Delivered electronically"
means delivered from the
seller to the purchaser by means other than tangible storage media.
(f) (e)
"Delivery charges" means
charges by the seller for
preparation and delivery to a location designated by the purchaser
of tangible personal property or services. Delivery charges
include, but are not limited to, transportation, shipping, postage,
handling, crating, and packing. Beginning September 1, 2004,
delivery charges do not include the charges for delivery of direct
mail if the charges are separately stated on an invoice or similar
billing document given to the purchaser. If a shipment includes
both exempt property and taxable property, the seller shall
allocate the delivery charge using 1 of the following methods:
(i) Multiply the delivery price by a fraction, the numerator of
which is the total sales prices of the taxable property and the
denominator of which is the total sales prices of all property in
the shipment.
(ii) Multiply the delivery price by a fraction, the numerator
of which is the total weight of the taxable property and the
denominator of which is the total weight of all property in the
shipment.
(g) (f)
"Dietary supplement"
means any product, other than
tobacco, intended to supplement the diet that is all of the
following:
(i) Required to be labeled as a dietary supplement identifiable
by the "supplemental facts" box found on the label as required by
21 CFR 101.36.
(ii) Contains 1 or more of the following dietary ingredients:
(A) A vitamin.
(B) A mineral.
(C) An herb or other botanical.
(D) An amino acid.
(E) A dietary substance for use by humans to supplement the
diet by increasing the total dietary intake.
(F) A concentrate, metabolite, constituent, extract, or
combination of any ingredient listed in sub-subparagraphs (A)
through (E).
(iii) Intended for ingestion in tablet, capsule, powder,
softgel, gelcap, or liquid form, or if not intended for ingestion
in 1 of those forms, is not represented as conventional food or for
use as a sole item of a meal or of the diet.
(h) (g)
"Direct mail" means
printed material delivered or
distributed by United States mail or other delivery service to a
mass audience or to addressees on a mailing list provided by the
purchaser or at the direction of the purchaser when the cost of the
items are not billed directly to the recipients, including tangible
personal property supplied directly or indirectly by the purchaser
to the direct mail seller for inclusion in the package containing
the printed material, but not including multiple items of printed
material delivered to a single address.
(i) (h)
"Drug" means a compound,
substance, or preparation, or
any component of a compound, substance, or preparation, other than
food or food ingredients, dietary supplements, or alcoholic
beverages, intended for human use that is 1 or more of the
following:
(i) Recognized in the official United States pharmacopoeia,
official homeopathic pharmacopoeia of the United States, or
official national formulary, or in any of their supplements.
(ii) Intended for use in the diagnosis, cure, mitigation,
treatment, or prevention of disease.
(iii) Intended to affect the structure or any function of the
body.
(j) (i)
"Durable medical
equipment" means equipment for home
use, other than mobility enhancing equipment, dispensed pursuant to
a prescription, including durable medical equipment repair or
replacement
parts, for that equipment, that does all of the
following:
(i) Can withstand repeated use.
(ii) Is primarily and customarily used to serve a medical
purpose.
(iii) Is not useful generally to a person in the absence of
illness or injury.
(iv) Is not worn in or on the body.
(k) "Durable medical equipment repair or replacement parts"
includes all components or attachments used in conjunction with
durable medical equipment.
(l) (j)
"Electronic" means
relating to technology having
electrical, digital, magnetic, wireless, optical, electromagnetic,
or similar capabilities.
(m) (k)
"Lease or rental" means
any transfer of possession or
control of tangible personal property for a fixed or indeterminate
term for consideration and may include future options to purchase
or extend. This definition applies only to leases and rentals
entered into after September 1, 2004 and has no retroactive impact
on leases and rentals that existed on that date. Lease or rental
does not include the following subparagraphs (i) through (iii) and
includes subparagraph (iv):
(i) A transfer of possession or control of tangible personal
property under a security agreement or deferred payment plan that
requires the transfer of title upon completion of the required
payments.
(ii) A transfer of possession or control of tangible personal
property under an agreement requiring transfer of title upon
completion of the required payments and payment of an option price
that does not exceed $100.00 or 1% of the total required payments,
whichever is greater.
(iii) The provision of tangible personal property along with an
operator for a fixed or indeterminate period of time, where that
operator is necessary for the equipment to perform as designed. To
be necessary, an operator must do more than maintain, inspect, or
set up the tangible personal property.
(iv) An agreement covering motor vehicles or trailers if the
amount of consideration may be increased or decreased by reference
to the amount realized upon sale or disposition of the property as
defined in section 7701(h)(1) of the internal revenue code, 26 USC
7701.
(n) (l) "Mobility
enhancing equipment" means equipment, other
than durable medical equipment or a motor vehicle or equipment on a
motor vehicle normally provided by a motor vehicle manufacturer,
dispensed pursuant to a prescription, including repair or
replacement parts for that equipment, that is all of the following:
(i) Primarily and customarily used to provide or increase the
ability to move from 1 place to another and is appropriate for use
at home or on a motor vehicle.
(ii) Not generally used by a person with normal mobility.
(o) (m)
"Prescription" means an
order, formula, or recipe,
issued in any form of oral, written, electronic, or other means of
transmission by a licensed physician or other health professional
as defined in section 3501 of the insurance code of 1956, 1956 PA
218, MCL 500.3501. For a hearing aid, prescription includes an
order, instruction, or direction of a hearing aid dealer or
salesperson licensed under article 13 of the occupational code,
1980 PA 299, MCL 339.1301 to 339.1309.
(p) (n)
"Prewritten computer
software" means computer
software, including prewritten upgrades, that is delivered by any
means and that is not designed and developed by the author or other
creator to the specifications of a specific purchaser. Prewritten
computer software includes the following:
(i) Any combination of 2 or more prewritten computer software
programs or portions of prewritten computer software programs.
(ii) Computer software designed and developed by the author or
other creator to the specifications of a specific purchaser if it
is sold to a person other than that specific purchaser.
(iii) The modification or enhancement of prewritten computer
software or portions of prewritten computer software where the
modification or enhancement is designed and developed to the
specifications of a specific purchaser unless there is a
reasonable, separately stated charge or an invoice or other
statement of the price is given to the purchaser for the
modification or enhancement. If a person other than the original
author or creator modifies or enhances prewritten computer
software, that person is considered to be the author or creator of
only that person's modifications or enhancements.
(q) (o)
"Prosthetic device" means
a replacement, corrective,
or supportive device, other than contact lenses and dental
prosthesis, dispensed pursuant to a prescription, including repair
or replacement parts for that device, worn on or in the body to do
1 or more of the following:
(i) Artificially replace a missing portion of the body.
(ii) Prevent or correct a physical deformity or malfunction of
the body.
(iii) Support a weak or deformed portion of the body.
(r) (p)
"Tangible personal
property" means personal property
that can be seen, weighed, measured, felt, or touched or that is in
any other manner perceptible to the senses and includes
electricity, water, gas, steam, and prewritten computer software.
(s) (q)
"Tobacco" means
cigarettes, cigars, chewing or pipe
tobacco, or any other item that contains tobacco.
Sec. 4g. (1) The following are exempt from the tax under this
act:
(a) Sales of drugs for human use that can only be legally
dispensed by prescription or food or food ingredients, except
prepared food intended for immediate human consumption.
(b) The deposit on a returnable container for a beverage or
the deposit on a carton or case that is used for returnable
containers.
(c) Food or tangible personal property purchased under the
federal food stamp program or meals sold by a person exempt from
the tax under this act that are eligible to be purchased under the
federal food stamp program.
(d) Fruit or vegetable seeds and fruit or vegetable plants if
purchased at a place of business authorized to accept food stamps
by the food and nutrition service of the United States department
of agriculture or a place of business that has made a complete and
proper application for authorization to accept food stamps but has
been denied authorization and provides proof of denial to the
department of treasury.
(e) Live animals purchased with the intent to be slaughtered
for human consumption.
(2) Food or drink heated or cooled mechanically, electrically,
or by other artificial means to an average temperature above 75
degrees Fahrenheit or below 65 degrees Fahrenheit before sale and
sold from a vending machine, except milk, nonalcoholic beverages in
a sealed container, and fresh fruit, is subject to the tax under
this act. The tax due under this act on the sale of food or drink
from a vending machine selling both taxable items and items exempt
under this subsection shall be calculated under this act based on 1
of the following as determined by the taxpayer:
(a) Actual gross proceeds from sales at retail.
(b) Forty-five percent of proceeds from the sale of items
subject to tax under this act or exempt from the tax levied under
this act, other than from the sale of carbonated beverages.
(3) "Food and food ingredients" means substances, whether in
liquid, concentrated, solid, frozen, dried, or dehydrated form,
that are sold for ingestion or chewing by humans and are consumed
for their taste or nutritional value. Food and food ingredients do
not include alcoholic beverages and tobacco.
(4) "Prepared food" means the following:
(a) Food sold in a heated state or that is heated by the
seller.
(b) Two or more food ingredients mixed or combined by the
seller for sale as a single item.
(c) Food sold with eating utensils provided by the seller,
including knives, forks, spoons, glasses, cups, napkins, straws, or
plates, but not including a container or packaging used to
transport the food.
(5) Prepared food does not include the following:
(a) Food that is only cut, repackaged, or pasteurized by the
seller.
(b) Raw eggs, fish, meat, poultry, and foods containing those
raw items requiring cooking by the consumer in recommendations
contained in section 3-401.11 of part 3-4 of chapter 3 of the 2001
food code published by the food and drug administration of the
public health service of the department of health and human
services, to prevent foodborne illness.
(c) Food sold in an unheated state by weight or volume as a
single item, without eating utensils.
(d) Bakery items, including bread, rolls, buns, biscuits,
bagels, croissants, pastries, doughnuts, danish, cakes, tortes,
pies, tarts, muffins, bars, cookies, and tortillas, sold without
eating utensils.
(6) "Prepared food intended for immediate consumption" means
prepared food.
Sec. 4k. (1) The sale of tangible personal property that is
part of a drop shipment is exempt from the tax under this act if
the taxpayer complies with the requirements of subsection (3).
(2) As used in this section, "drop shipment" means the direct
delivery of tangible personal property to a purchaser in Michigan
by a person who has sold the property to another person not
licensed under this act but possessing a resale or exemption
certificate, or
other written evidence of exemption authorized by
another state, or any other acceptable information evidencing
qualification for a resale exemption, for resale to the Michigan
purchaser.
(3) For each transaction for which an exemption is claimed
under subsection (1), the taxpayer shall provide, but not more
frequently than annually, any information required by the board
under the streamlined sales and use tax agreement in addition to
the following information in a form prescribed by the department to
the department:
(a) The name, address, and, if readily available, the federal
taxpayer identification number of the person to whom the property
is sold for resale.
(b) The name, address, and, if readily available, the federal
taxpayer identification number of the person to whom the property
is shipped in Michigan.
(4) A sale at retail includes a drop shipment.
Sec.
4bb. (1) Beginning January 1, 2005, a qualified
organization
subject to the tax under this act may exclude from the
gross
proceeds used for the computation of the tax the sale of an
eligible
automobile to a qualified recipient the sale of an
eligible automobile to a qualified recipient by a qualified
organization that is subject to the tax under this act is exempt.
(2) As used in this section:
(a) "Eligible automobile" means an automobile that meets all
of the following requirements:
(i) The automobile has been inspected by a mechanic certified
under the motor vehicle service and repair act, 1974 PA 300, MCL
257.1301 to 257.1340.
(ii) The automobile is insured as required under state law.
(iii) The automobile is registered to a qualified recipient.
(b) "Qualified organization" means an organization that
applies for certification not later than July 1 of the year in
which an exemption is claimed under this section and is certified
by the department of treasury as meeting all of the following
requirements:
(i) The organization is exempt from taxation under section
501(c)(3) of the internal revenue code, 26 USC 501.
(ii) The organization is licensed under the charitable
organizations and solicitations act, 1975 PA 169, MCL 400.271 to
400.294.
(iii) The organization administers a program to provide a
qualified recipient with an eligible automobile for transportation
to his or her place of employment or for employment-related
activities.
(c) "Qualified recipient" means a person certified by a
qualified organization as meeting all of the following
qualifications:
(i) The qualified recipient receives or, if he or she applied,
would be eligible to receive public assistance through a program
created and administered under the social welfare act, 1939 PA 280,
MCL 400.1 to 400.119b.
(ii) The qualified recipient has a valid Michigan operator's or
chauffeur's license.
(iii) The qualified recipient is financially capable of meeting
any loan payment, insurance payment, or other expenditure
associated with the eligible vehicle.
(iv) Public transportation is not reasonably available to the
qualified recipient, the qualified recipient has no other reliable
means by which to commute to his or her place of employment, and
the qualified recipient will use the eligible vehicle as his or her
primary means of transportation to commute to and from his or her
place of employment.
(v) The qualified recipient has a demonstrated ability to
maintain employment.
(vi) If the qualified recipient is currently employed for not
less than an average of 20 hours per week, the qualified recipient
requires an automobile to retain his or her current employment or
to accept a verified offer of employment in a position that is
demonstrably superior to his or her current position of employment.
(vii) If the qualified recipient is not currently employed or
is employed for less than an average of 20 hours per week, the
qualified recipient requires an automobile to accept a verified
offer of employment of not less than an average of 20 hours per
week and cannot begin employment in that position without an
automobile.
Sec. 12. (1) If an exemption from the tax under this act is
claimed, the seller shall obtain identifying information of the
purchaser and the reason for claiming the exemption at the time of
the purchase or at a later date. The seller shall obtain the same
information for a claimed exemption regardless of the medium in
which the transaction occurred.
(2) A seller shall use a standard format for claiming an
exemption electronically as adopted by the governing board under
the streamlined sales and use tax agreement.
(3) A purchaser is not required to provide a signature to
claim an exemption under this act unless a paper exemption form is
used.
(4) A seller shall maintain a proper record of all exempt
transactions and shall provide the record if requested by the
department.
(5) A seller who complies with the requirements of this
section is not liable for the tax if a purchaser improperly claims
an exemption. A purchaser who improperly claims an exemption is
liable for the tax due under this act. This subsection does not
apply
if a seller fraudulently fails to collect the tax, or
solicits
a purchaser to make an improper claim for exemption, .
or
accepts an exemption form when the purchaser claims an entity-based
exemption if both of the following circumstances occur:
(a) The subject of the transaction sought to be covered by the
exemption form is actually received by the purchaser at a location
operated by the seller.
(b) The state in which that location operated by the seller is
located provides an exemption form that clearly and affirmatively
indicates that the claimed exemption is not available in that
state.
(6) A seller who obtains a fully completed exemption form or
captures the relevant data elements as outlined in this section
within 90 days after the date of sale is not liable for the tax.
(7) If the seller has not obtained an exemption form or all
relevant data elements, the seller may, within 120 days after a
request for substantiation by the department, either prove that the
transaction was not subject to tax by other means or obtain a fully
completed exemption form from the purchaser, taken in good faith.
The department may, in its discretion, allow a seller additional
time to comply with this subsection.
(8) A seller is not liable for the tax if the seller obtains a
blanket exemption form for a purchaser with which the seller has a
recurring business relationship. Renewals of blanket exemption
forms or updates of exemption form information or data elements are
not required if there is a recurring business relationship between
the seller and the purchaser. For purposes of this section, a
recurring business relationship exists when a period of not more
than 12 months elapses between sales transactions.
(9) A certified service provider shall be considered a seller
under this section. As used in this section, "certified service
provider" means that term as defined in section 25 of the
streamlined sales and use tax administration act, 2004 PA 174, MCL
205.825.
Sec. 18. (1) A person liable for any tax imposed under this
act shall keep accurate and complete beginning and annual inventory
and purchase records of additions to inventory, complete daily
sales records, receipts, invoices, bills of lading, and all
pertinent documents in a form the department requires. If an
exemption from the tax under this act is claimed by a person
because the sale is for resale at retail, a record shall be kept of
the sales tax license number if the person has a sales tax license.
These records shall be retained for a period of 4 years after the
tax imposed under this act to which the records apply is due or as
otherwise provided by law.
(2) If the department considers it necessary, the department
may require a person, by notice served upon that person, to make a
return, render under oath certain statements, or keep certain
records the department considers sufficient to show whether or not
that person is liable for the tax under this act.
(3) A person knowingly making a sale of tangible personal
property for the purpose of resale at retail to another person not
licensed under this act is liable for the tax under this act unless
the transaction is exempt under the provisions of section 4k.
(4) If the taxpayer fails to file a return or to maintain or
preserve proper records as prescribed in this section, or the
department has reason to believe that any records maintained or
returns filed are inaccurate or incomplete and that additional
taxes are due, the department may assess the amount of the tax due
from the taxpayer based on information that is available or that
may become available to the department. That assessment is
considered prima facie correct for the purpose of this act and the
burden of proof of refuting the assessment is upon the taxpayer.
(5) If all the information is maintained as provided under
section 12, an exemption certificate is not required for an
exemption claim by the following:
(a) A person licensed by the Michigan liquor control
commission as a wholesaler for purposes of sales of alcoholic
liquor to another person licensed by the Michigan liquor control
commission. As used in this subsection, "alcoholic liquor",
"authorized distribution agent", and "wholesaler" mean those terms
as defined in the Michigan liquor control code of 1998, 1998 PA 58,
MCL 436.1101 to 436.2303.
(b) The Michigan liquor control commission or a person
certified by the commission as an authorized distribution agent for
purposes of the sale and distribution of alcoholic liquor to a
person licensed by the Michigan liquor control commission.
(6) For purposes of this act, a blanket exemption claim covers
all exempt transfers between the taxpayer and the buyer for a
period of 4 years or for a period of less than 4 years as stated on
the blanket exemption claim if that period is agreed to by the
buyer and taxpayer. Renewal of a blanket exemption claim or an
update of exemption claim information or data elements is not
required if there is a recurring business relationship between the
seller and the purchaser. For purposes of this subsection, a
recurring business relationship exists when a period of not more
than 12 months elapses between sales transactions.
(7)
This section applies if this state is a member state of
the
streamlined sales and use tax agreement.
Sec. 21. (1) A purchaser of direct mail other than a holder of
a direct pay permit under section 8 of the use tax act, 1937 PA 94,
MCL 205.98, shall provide to the seller at the time of purchase
either
a direct mail an exemption
form as prescribed by the
department or information indicating the taxing jurisdictions to
which the direct mail is delivered to recipients.
(2)
Upon receipt of the direct mail exemption
form, the seller
is relieved of all obligation to collect, pay, or remit the
applicable tax and the purchaser is then obligated to pay the
applicable tax on a direct pay basis.
(3)
A direct mail An exemption
form remains in effect for all
subsequent sales of direct mail by the seller to the purchaser
until revoked in writing.
(4) Upon receipt of information from the purchaser indicating
the taxing jurisdictions to which the direct mail is delivered to
recipients, the seller shall collect the tax according to that
delivery information. In the absence of bad faith, the seller is
relieved of any further obligation to collect the tax if the seller
collected the tax using the delivery information provided by the
purchaser.
(5) If the purchaser does not have a direct pay permit and
does
not provide the seller with a direct mail an exemption form or
delivery information as required in subsection (1), the seller
shall collect the tax in the same manner as provided in section 19.
Nothing in this subsection limits a purchaser's obligation for the
tax under this act.
(6) A purchaser who provides the seller with documentation of
a
direct pay permit is not required to provide a direct mail an
exemption form or delivery information.
Enacting section 1. Sections 17 and 20 of the general sales
tax act, 1933 PA 167, MCL 205.67 and 205.70, are repealed.