SALES, USE TAX EXEMPT; DELIVERY & INSTALL H.B. 4039 (H-1) & 4253 (H-1):
SUMMARY AS PASSED BY THE SENATE
House Bill 4039 (Substitute H-1 as passed by the Senate) (enrolled version)
House Bill 4253 (Substitute H-1 as passed by the Senate) (enrolled version)
Sponsor: Representative Pat Outman (H.B. 4039)
Representative Kevin Coleman (H.B. 4253)
Senate Committee: Committee of the Whole
CONTENT
House Bill 4039 (H-1) and House Bill 4253 (H-1) would amend the General Sales Tax Act and the Use Tax, respectively, to modify the definition of "sales price" and "purchase price", as applicable, to eliminate delivery and installation charges from those definitions.
The General Sales Tax Act levies a 6.0% tax on the gross proceeds (i.e., "sales price") of a business that makes sales at retail. The Use Tax levies a 6.0% tax on the price (i.e., "purchase price") of tangible personal property used, stored, or consumed in Michigan.
"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. "Purchase price" or "price" means the total amount of consideration paid by the consumer to the seller, 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 use tax.
The terms include certain categories of costs and charges, including delivery and 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. The bill instead would refer to delivery charges and installation charges. In the case of delivery charges, a seller would not be liable under the Acts for delivery charges allocated to the delivery of exempt property.
The terms exclude from the respective definitions other listed charges, credits, and amounts. Under the bill, delivery or installation charges would be excluded if those charges were separately stated on the invoice, bill of sale, or similar document provided to the purchaser, and the seller (under House Bill 4039 (H-1)) or taxpayer (under House Bill 4253 (H-1)) maintained its books and records to show separately the transaction used to determine the tax levied under the applicable Acts. These provisions would not apply to the delivery or installation charges involving or relating to the sale of electricity, natural gas, or artificial gas by a utility.
"Utility" would mean either of the following: i) a person regulated by the Michigan Public Service Commission as a utility; or b) a person that operates equipment or facilities for producing, generating, transmitting, delivering, or furnishing electricity within the State for the public for compensation, regardless of the person's owner, ownership structure, or regulation by the Michigan Public Service Commission.
All of the following would apply only to delivery and installation charges described above, except those involving or relating to the sale of electricity, natural gas, or artificial gas by a utility:
-- Within 90 days after the bills' e