Use tax: exemptions; delivery and installation; exempt from use tax. Amends secs. 2 & 21 of 1937 PA 94 (MCL 205.92 & 205.111).
Impact
The proposed changes in SB 0048 will significantly modify how use tax is assessed in Michigan. By exempting delivery and installation charges from the taxable purchase price, the bill could potentially reduce the overall tax liability for consumers purchasing goods that involve such services. This amendment can impact various industries, particularly retail and construction, where goods are often sold with additional delivery or installation costs. As a result, this could lead to lower final sales prices for consumers on certain goods, enabling a more favorable economic environment for consumers making large purchases.
Summary
Senate Bill 0048 proposes amendments to the 1937 Use Tax Act, specifically targeting sections 2 and 21. The bill seeks to clarify the definitions and parameters surrounding the use tax, including how tangible personal property is considered for taxation. One of the primary focuses of SB 0048 is the establishment of exemptions related to delivery and installation charges, which would not be included in the purchase price used to calculate the use tax. This change aims to provide clearer guidelines and support for consumers and businesses in understanding their tax obligations.
Contention
However, the bill has raised concerns among various stakeholders about its broader implications. Some legislators and community advocates worry that by exempting these charges, there may be a significant negative impact on state and local revenue generated from sales taxes. There is also the argument that these exemptions could complicate tax compliance for businesses, as they would need to adjust their invoicing practices to meet the new regulations. The discussions surrounding SB 0048 reflect a broader tension between supporting consumer affordability while ensuring sustainable funding for essential state services.
Use tax: exemptions; offset of the trade in value of personal electronics; provide for. Amends sec. 2 of 1937 PA 94 (MCL 205.92). TIE BAR WITH: HB 4376'25