Michigan Compiled Laws — GENERAL SALES TAX ACT (Act 167 of 1933)

Definitions; unlicensed person as agent of dealer, distributor, supervisor, or employer; regarding dealer, distributor, supervisor, or employer as making sales at retail prices; applicability to delivery and installation charges.

(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, limited liability company, estate, trust, receiver, trustee, syndicate, the United States, this st…

Additional definitions.

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) "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. (c) "Comp…

Sales tax; rate; additional applicability; separate books required; penalty; tax as personal obligation of taxpayer; exemption.

(1) Except as provided in section 2a, there is levied upon and there shall be collected from all persons engaged in the business of making sales at retail, by which ownership of tangible personal property is transferred for consideration, an annual tax for the privilege of engaging in that business equal to 6% of the g…

Reduction of tax on vehicle for which special registration secured; limitation; certification.

(1) For a sale at retail to a person of a vehicle for which a special registration is secured pursuant to section 226(9) of the Michigan vehicle code, 1949 PA 300, MCL 257.226, the tax imposed under this act shall be reduced by the sum of the following amounts: (a) The use tax imposed on the vehicle by the state to whi…

Retail sale of tangible personal property to purchaser; presumptions; agreement to purchase advertisements; effectiveness of section; definitions.

(1) A seller who sells tangible personal property to a purchaser in this state is presumed to be engaged in the business of making sales at retail in this state if the seller or a person, including an affiliated person, other than a common carrier acting as a common carrier, engages in or performs any of the following…

Seller of tangible personal property or services; nexus; conditions; application to transactions after October 1, 2018; inclusion of sales of marketplace facilitator and marketplace seller; exception; definitions.

(1) A seller of tangible personal property is engaged in the business of making sales at retail in this state if the seller meets either of the following conditions: (a) The seller's gross receipts from sales to purchasers in this state exceed $100,000.00 in the previous calendar year. (b) The seller has 200 or more se…

Marketplace facilitators; nexus; report; class action prohibited; audit; liability; conditions; definitions.

(1) Notwithstanding anything to the contrary in this act, a marketplace facilitator engaged in the business of making sales at retail of tangible personal property in this state shall remit the tax due under this act on all taxable sales made by the marketplace facilitator or facilitated for marketplace sellers to a pu…

(1) Subject to subsections (4) and (5), if a person engages or continues in a business for which a privilege tax is imposed by this act, the person shall, under rules the department prescribes, apply for and obtain from the department a license to engage in and to conduct that business for the current tax year. If the…

Deductions; filing estimated returns and annual periodic reconciliations; registration under streamlined sales and use tax agreement.

(1) In computing the amount of tax levied under this act for any month, a taxpayer not subject to section 6(2) may deduct the amount provided by subdivision (a) or (b), whichever is greater: (a) If the tax that accrued to this state from the sales at retail during the preceding month is remitted to the department on or…

Sales tax; exemptions; limitation.

(1) Subject to subsection (2), the following are exempt from the tax under this act: (a) A sale of tangible personal property not for resale to a nonprofit school, nonprofit hospital, or nonprofit home for the care and maintenance of children or aged individuals operated by an entity of government, a regularly organize…

Deductible sales of gasoline; statement of transferee.

Any taxpayer, who does not include in the amount of his gross proceeds used for the computation of the tax on sales of gasoline pursuant to the provisions of subdivision (f) of section 4a by reason of the filing with him by the transferee of a statement in a form approved by the department of revenue, shall not hereaft…

Additional sales excluded from tax.

The following are exempt from the tax under this act: (a) The sale of tangible personal property to a person that is a lessor licensed under the use tax act, 1937 PA 94, MCL 205.91 to 205.111, and whose rental receipts are taxed or specifically exempt under the use tax act, 1937 PA 94, MCL 205.91 to 205.111. (b) The sa…

Sales of vehicles to members of armed forces.

A sale of a vehicle from a Michigan retailer for titling and registration in his or her home state of residency or domicile to a nonresident person of Michigan actually serving in the United States armed forces is exempt from the tax under this act. At the time of sale or purchase, the purchaser shall provide a sworn s…

Commissions paid to entities exempt under MCL 205.54a; exemptions.

Commissions paid to an entity exempt under the provisions of section 4a from sales of tangible personal property dispensed through a nonelectrically operated vending machine containing unsorted confections, nuts, or merchandise which, upon insertion of a coin dispenses the same in substantially equal portions, at rando…

Sales exempt from tax; tax on sale of food or drink from vending machine; definitions.

(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, over-the-counter drugs for human use that are legally dispensed by prescription, or food or food ingredients, except prepared food intended for immediate human consumption. As u…

Exemptions.

Sales to the United States, its unincorporated agencies and instrumentalities, any incorporated agency or instrumentality of the United States wholly owned by the United States or by a corporation wholly owned by the United States, the American Red Cross and its chapters and branches, and this state or its departments…

Bad debt; definitions; deduction; amount; payment of bad debt; liability; written election designating party claiming deduction; evidence required to support claim for deduction; change in tax rate; review; taxpayer under streamlined sales and use tax agreement.

(1) As used in this section: (a) "Bad debt" means any portion of a debt that is related to a sale at retail taxable under this act for which gross proceeds are not otherwise deductible or excludable and that is eligible to be claimed, or could be eligible to be claimed if the taxpayer kept accounts on an accrual basis,…

Sale of tangible personal property for use in qualified business activity of purchaser; definition.

(1) A sale of tangible personal property used in a qualified business activity of the purchaser is exempt from the tax under this act. (2) As used in this section, "qualified business activity" means that term as defined in the enterprise zone act, 1985 PA 224, MCL 125.2101 to 125.2123.

Drop shipment; definition.

(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 w…

Sale of rail freight or passenger cars, locomotives or other rolling stock, roadway machines and certain work equipment; exemption.

A sale of rail freight or passenger cars, locomotives or other rolling stock, roadway machines and work equipment primarily of a flanged wheel nature, accessories, attachments including parts and materials used for repair, lubricants, or fuel, used in rail operations is exempt from the tax under this act. This exemptio…

Sale of electricity, natural or artificial gas, home heating fuels, or steam; exemption from sales tax at additional rate; application of additional rate.

The sale for residential use of electricity, natural or artificial gas, or home heating fuels is exempt from the sales tax at the additional rate of 2% approved by the electors on March 15, 1994. For purposes of applying the sales tax at the additional rate of 2% to the sale of electricity, natural or artificial gas, o…

(1) The sale of the first $10,000.00 of tangible personal property in a calendar year for fund-raising purposes by a school, church, hospital, parent cooperative preschool, or nonprofit organization that has a tax-exempt status under section 4q(1)(a) or (b) and that has aggregate sales at retail in the calendar year of…

Property offered to or made structural part of sanctuary; exemption; “regularly organized church or house of religious worship” and “sanctuary” defined.

(1) A sale of tangible personal property purchased by a person engaged in the business of constructing, altering, repairing, or improving real estate for others if the property is to be affixed to or made a structural part of a sanctuary is exempt from the tax under this act. (2) As used in this section: (a) "Regularly…

Sales of tangible personal property not for resale; exemption; applicability; duties of transferee; evidence of exemption; limitation.

(1) A sale of tangible personal property not for resale to the following, subject to subsection (5), is exempt from the tax under this act: (a) A health, welfare, educational, cultural arts, charitable, or benevolent organization not operated for profit that has been issued an exemption ruling letter to purchase items…

Qualified truck, trailer, or rolling stock; exemption; definitions.

(1) All of the following are exempt from the tax under this act: (a) The product of the out-of-state usage percentage and the gross proceeds otherwise taxable under this act from the sale of a qualified truck or a trailer designed to be drawn behind a qualified truck, purchased after December 31, 1996 and before May 1,…