Bill Summary – FastDemocracy

SENATE BILL NO. 885
     May 30, 2024, Introduced by Senators WEBBER and DAMOOSE and referred to the Committee
       on Finance, Insurance, and Consumer Protection.
          A bill to amend 1933 PA 167, entitled
    "General sales tax act,"
    by amending section 4x (MCL 205.54x), as amended by 2009 PA 53.
                    THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
       Sec. 4x. (1) A sale to a domestic air carrier of 1 or more of
 the following is exempt from the tax under this act:
       (a) An aircraft that has a maximum certificated takeoff weight
 of at least 6,000 pounds for use solely in the transport of air
 cargo, passengers, or a combination of air cargo and passengers.
       (b) Parts and materials, excluding shop equipment or fuel,
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 affixed or to be affixed to an aircraft that has a maximum
 certificated takeoff weight of at least 6,000 pounds for use solely
 in the transport of air cargo, passengers, or a combination of air
 cargo and passengers.The tax levied under this act does not apply
 to the sale of an aircraft to a domestic air carrier if the
 aircraft has a maximum certificated takeoff weight of at least
 6,000 pounds and is for use solely in the transport of air cargo,
 passengers, or a combination of air cargo and passengers.
       (2) The tax levied under this act does not apply to the sale
 of parts or materials, excluding shop equipment or fuel, affixed or
 to be affixed to an aircraft. that meets all of the following
 conditions:
       (a) The aircraft leaves this state within 15 days after the
 sooner of the issuance of the final billing or authorized approval
 for final return to service, completion of the maintenance record
 entry, and completion of the test flight and ground test for
 inspection as required under 14 CFR 91.407.
       (b) The aircraft was not based in this state or registered in
 this state before the parts or materials are affixed to the
 aircraft and the aircraft is not based in this state or registered
 in this state after the parts or materials are affixed to the
 aircraft.
       (3) The tax levied under this act does not apply to the sale
 of an aircraft temporarily located in this state for the purpose of
 a sale and prepurchase evaluation, customization, improvement,
 maintenance, or repair if all of the following conditions are
 satisfied:
       (a) The aircraft leaves this state within 15 days after the
 sale and the completion of any prepurchase evaluation,
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 customization, improvement, maintenance, or repair that is
 associated with the sale, whichever is later.
       (b) The aircraft was not based in this state or registered in
 this state before the sale and any prepurchase evaluation,
 customization, improvement, maintenance, or repair that is
 associated with the sale is completed and the aircraft is not based
 in this state or registered in this state after the sale and any
 prepurchase evaluation, customization, improvement, maintenance, or
 repair that is associated with the sale is completed.
       (4) A sale of an aircraft to a person for subsequent lease to
 a domestic air carrier operating under a certificate issued by the
 federal aviation administration Federal Aviation Administration
 under 14 CFR part 121, for use solely in the regularly scheduled
 transport of passengers is exempt from the tax under this act.
       (5) As used in this section:
       (a) "Aircraft" means an aerial vehicle that is used in
 aviation, other than an unmanned aerial vehicle.
       (b) (a) "Based in this state" means hangared or stored in this
 state for not less than 10 days in not less than 3 nonconsecutive
 months during the immediately preceding a 12-month period.
       (c) (b) "Customization" means any improvement, maintenance, or
 repair that is performed on an aircraft that is associated with the
 sale of the aircraft.
       (d) (c) "Domestic air carrier" is limited to entities engaged
 primarily in the commercial transport for hire of air cargo,
 passengers, or a combination of air cargo and passengers as a
 business activity.
       (e) (d) "Prepurchase evaluation" means an examination of an
 aircraft to provide a potential purchaser with information relevant
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 to the potential purchase.
       (f) (e) "Registered in this state" means an aircraft
 registered with the state transportation department, bureau of
 aeronautics, or registered with the federal aviation administration
 Federal Aviation Administration to an address located in this
 state.
       Enacting section 1. This amendatory act takes effect 90 days
 after the date it is enacted into law.
       Enacting section 2. It is the intent of the legislature to
 annually appropriate sufficient funds from the state general fund
 to the state school aid fund created in section 11 of article IX of
 the state constitution of 1963 to fully compensate for any loss of
 revenue to the state school aid fund resulting from the enactment
 of this amendatory act.
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Statutes affected: 
Senate Introduced Bill: 205.54