Bill Summary – FastDemocracy

SENATE BILL NO. 886
     May 30, 2024, Introduced by Senators DAMOOSE and WEBBER and referred to the Committee
       on Finance, Insurance, and Consumer Protection.
          A bill to amend 1937 PA 94, entitled
    "Use tax act,"
    by amending section 4k (MCL 205.94k), as amended by 2012 PA 429.
                    THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
       Sec. 4k. (1) The tax levied under this act does not apply to
 parts and materials, excluding shop equipment or fuel, affixed to
 or to be affixed to an aircraft owned or used by a domestic air
 carrier that is any of the following:
       (a) An aircraft for use solely in the transport of air cargo
 or a combination of air cargo and passengers that has a maximum
    ERE                                                                           05767'24
                                       2
 certificated takeoff weight of at least 12,500 pounds for taxes
 levied before January 1, 1997 and at least 6,000 pounds for taxes
 levied after December 31, 1996.
       (b) An aircraft that is used solely in the regularly scheduled
 transport of passengers.
       (c) An aircraft other than an aircraft described in
 subdivision (b), that has a maximum certificated takeoff weight of
 at least 12,500 pounds for taxes levied before January 1, 1997 and
 at least 6,000 pounds for taxes levied after December 31, 1996, and
 that is designed to have a maximum passenger seating configuration
 of more than 30 seats and is used solely in the transport of
 passengers.the use of an aircraft by a domestic air carrier if the
 aircraft has a maximum certificated takeoff weight of at least
 6,000 pounds and is used 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.
     ERE                                                           05767'24
                                       3
       (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,
 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 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
 associated with the sale is completed.
       (4) For taxes levied after December 31, 1992, the tax levied
 under this act does not apply to the storage, use, or consumption
 of rolling stock used in interstate commerce and purchased, rented,
 or leased by an interstate fleet motor carrier. A refund for taxes
 paid before January 1, 1997 shall not be paid under this subsection
 if the refund claim is made after June 30, 1997.
       (5) For taxes levied after December 31, 1996 and before May 1,
 1999, the tax levied under this act does not apply to the product
 of the out-of-state usage percentage and the price otherwise
 taxable under this act of a qualified truck or a trailer designed
 to be drawn behind a qualified truck, purchased, rented, or leased
 in this state by an interstate fleet motor carrier and used in
 interstate commerce.
     ERE                                                          05767'24
                                          4
       (6) 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" means a person 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) "Interstate fleet motor carrier" means a person
 engaged in the business of carrying persons or property, other than
 themselves, their employees, or their own property, for hire across
 state lines, whose fleet mileage was driven at least 10% outside of
 this state in the immediately preceding tax year.
       (f) (e) "Out-of-state usage percentage" is a fraction, the
 numerator of which is the number of miles driven outside of this
 state in the immediately preceding tax year by qualified trucks
 used by the taxpayer and the denominator of which is the total
 miles driven in the immediately preceding tax year by qualified
 trucks used by the taxpayer. Miles driven by qualified trucks used
 solely in intrastate commerce shall must not be included in
 calculating the out-of-state usage percentage.
       (g) (f) "Prepurchase evaluation" means an examination of an
 aircraft to provide a potential purchaser with information relevant
 to the potential purchase.
     ERE                                                            05767'24
                                       5
       (h) (g) "Qualified truck" means a commercial motor vehicle
 power unit that has 2 axles and a gross vehicle weight rating in
 excess of 10,000 pounds or a commercial motor vehicle power unit
 that has 3 or more axles.
       (i) (h) "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.
       (j) (i) "Rolling stock" means a qualified truck, a trailer
 designed to be drawn behind a qualified truck, and parts or other
 tangible personal property affixed to or to be affixed to and
 directly used in the operation of either a qualified truck or a
 trailer designed to be drawn behind a qualified truck.
       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.
     ERE                          Final Page                      05767'24
Statutes affected: 
Senate Introduced Bill: 205.94