HOUSE BILL NO. 5595
March 14, 2024, Introduced by Reps. BeGole, Bezotte, Kunse, Beson, Bierlein, Johnsen, Neyer,
Arbit, Jaime Greene, Schmaltz, Roth, Phil Green, Aragona, St. Germaine, Harris and DeBoyer
and referred to the Committee on Tax Policy.
A bill to amend 1933 PA 167, entitled
"General sales tax act,"
by amending section 4q (MCL 205.54q), as amended by 2018 PA 530.
THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
1 Sec. 4q. (1) A Subject to subsection (5), a sale of tangible
2 personal property not for resale to the following , subject to
3 subsection (5), is exempt from the tax under this act:
4 (a) A health, welfare, educational, cultural arts, charitable,
5 or benevolent organization not operated for profit that has been
ERE 02699'23
 2
1 issued an exemption ruling letter to purchase items exempt from tax
2 before July 17, 1998 signed by the administrator of the sales, use,
3 and withholding taxes division of the department.
4 (b) An organization not operated for profit and exempt from
5 federal income tax under section 501(c)(3) or 501(c)(4) (4) of the
6 internal revenue code of 1986, 26 USC 501.
7 (c) An organization not operated for profit and exempt from
8 federal income tax under section 501(c)(19) of the internal revenue
9 code of 1986, 26 USC 501.
10 (2) The Except as otherwise provided in subsection (6), the
11 exemptions provided for in subsection (1) do not apply to any of
12 the following:
13 (a) Sales of tangible personal property and sales of vehicles
14 licensed for use on public highways that are not used primarily to
15 carry out the purposes of the organization or to raise funds or
16 obtain resources necessary to carry out the purposes of the
17 organization as stated in the bylaws or articles of incorporation
18 of the exempt entity.
19 (b) Sales of tangible personal property or vehicles used for
20 purposes of raising funds or obtaining resources if the sales price
21 exceeds the following:
22 (i) For an organization exempt under subsection (1)(a) or (b),
23 $5,000.00.
24 (ii) For an organization exempt under subsection (1)(c),
25 $25,000.00.
26 (3) At the time of the transfer of the tangible personal
27 property exempt under subsection (1), the transferee shall do 1 of
28 the following:
29 (a) Present the exemption ruling letter signed by the
ERE 02699'23
 3
1 administrator of the sales, use, and withholding taxes division of
2 the department certifying that the property is to be used or
3 consumed in connection with the operation of the organization.
4 (b) Do both of the following:
5 (i) Present a signed statement, on a form approved by the
6 department, stating 1 of the following:
7 (A) If subsection (6) does not apply, that the property is to
8 be used or consumed in connection with the operation of the
9 organization, to carry out the purpose or purposes of the
10 organization, or to raise funds or obtain resources necessary for
11 the operation of the organization, that the organization qualifies
12 as an exempt organization under this section, and that the sales
13 price of any single item of tangible personal property or vehicle
14 purchased for purposes of raising funds or obtaining resources does
15 not exceed the applicable cap amount established in subsection
16 (2)(b). The transferee shall also provide
17 (B) If subsection (6) applies, that the property is prepared
18 food to be used or consumed in connection with a fundraiser or
19 other organized event held by the organization and that the
20 organization qualifies as an exempt organization under this
21 section.
22 (ii) Provide to the transferor a copy of the federal exemption
23 letter. However, a copy of the federal exemption letter is not
24 required if the organization is exempt from filing an application
25 for exempt status with the internal revenue service.Internal
26 Revenue Service.
27 (4) The letter provided under subsection (3)(a) and the
28 statement with the accompanying letter provided under subsection
29 (3)(b) shall be accepted by all courts as prima facie evidence of
ERE 02699'23
 4
1 the exemption and the statement shall provide that if the claim for
2 tax exemption is disallowed, the transferee will reimburse the
3 transferor for the amount of tax involved.
4 (5) Except as otherwise provided in subsection (6), all of the
5 following limitations apply to an exemption under subsection (1):
6 (a) The tangible personal property under subsection (1) is
7 exempt only to the extent that the property is used to carry out
8 the purposes of the organization or to raise funds or obtain
9 resources necessary to carry out the purposes of the organization
10 as stated in the organization's bylaws or articles of
11 incorporation.
12 (b) The exemption for purposes of carrying out the purposes of
13 the organization as stated in its bylaws or articles of
14 incorporation is limited to the percentage of exempt use to total
15 use determined by a reasonable formula or method approved by the
16 department.
17 (c) The exemption for any single item of tangible personal
18 property or vehicle used to raise funds or obtain resources is
19 limited to a sales price that does not exceed $5,000.00 for an
20 organization exempt under subsection (1)(a) or (b) and $25,000.00
21 for an organization exempt under subsection (1)(c).
22 (6) A sale of prepared food to an organization described in
23 subsection (1) to be used or consumed in connection with a
24 fundraiser or other organized event held by the organization is
25 exempt from the tax under this act under subsection (1) without
26 regard to the limitations described in subsections (2) and (5).
27 (7) As used in this section, "prepared food" means that term
28 as defined in section 4g.
ERE Final Page 02699'23


Statutes affected:
House Introduced Bill: 205.54