Michigan Senate Bill SB0416

Michigan 2023-2024 Regular Session

• Introduced: 6/27/23
• Refer: 6/27/23
• Report Pass: 11/9/23
• Refer: 11/9/23
• Report Pass: 1/17/24
• Engrossed: 1/30/24
• Refer: 1/30/24
• Report Pass: 3/6/24
• Enrolled: 6/4/24
• Chaptered: 6/20/24
• Passed: 6/20/24

Caption

Use tax: exemptions; identifying information required for claiming exemption; include purchaser's license number issued by the Michigan liquor control commission to satisfy the requirements and add exemption for micro brewers. Amends secs. 14a & 14b of 1937 PA 94 (MCL 205.104a & 205.104b). TIE BAR WITH: SB 0415'23

Impact

The amendments outlined in SB 0416 are expected to impact state laws significantly by providing clearer guidelines on how businesses should handle sales tax exemptions. This includes maintaining necessary records for at least four years and detailed procedures for both tax assessment and refund claims. By including a specific exemption for micro brewers and allowing them to use their license numbers as justification for tax exemptions, the legislation acknowledges the unique operational contexts of niche markets within Michigan's alcohol industry.

Summary

Senate Bill 0416 proposed amendments to Michigan's existing laws regarding the levy and collection of excise taxes on the use and consumption of tangible personal property and certain services. Specifically, the bill aimed to enhance the process of claiming exemptions from use tax by requiring sellers to collect identifying information from purchasers claiming exemptions. The legislation has been characterized as a necessary adjustment to better align the administration of tax exemptions with business practices, particularly for businesses engaging in the sale of alcohol, including micro brewers.

Sentiment

The sentiment surrounding SB 0416 was largely supportive among stakeholders in the alcohol industry who viewed the updated rules as a step towards reducing bureaucracy and promoting fairer practices. However, concerns were raised by some regarding the administrative burden that may arise from the new record-keeping requirements. Overall, proponents argued that these changes would help stimulate economic activity within the craft beverage sector while ensuring that the state could effectively evaluate and collect due taxes.

Contention

While the bill received broad support, especially from legislators representing the brewing community, there were discussions regarding the potential complexities involved in implementing the new exemption frameworks. Critics expressed worries that requiring detailed purchaser information could lead to complications during audits and may create additional layers of compliance for smaller businesses. Despite these concerns, the bill proceeded with a notable majority during voting, reflecting a consensus on the need for improved tax exemption protocols.