June 16, 2005, Introduced by Rep. Miller and referred to the Committee on Tax Policy.
A bill to amend 1937 PA 94, entitled
"Use tax act,"
by amending section 3a (MCL 205.93a), as amended by 2004 PA 172.
THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
Sec. 3a. (1) The use or consumption of the following is taxed
under this act in the same manner as tangible personal property is
taxed under this act:
(a) Except as provided in section 3b, intrastate telephone,
telegraph, leased wire, and other similar communications, including
local telephone exchange and long distance telephone service that
both originates and terminates in Michigan, and telegraph, private
line, and teletypewriter service between places in Michigan, but
excluding telephone service by coin-operated installations,
switchboards, concentrator-identifiers, interoffice circuitry and
their accessories for telephone answering service, and directory
advertising proceeds.
(b) Rooms or lodging furnished by hotelkeepers, motel
operators, and other persons furnishing accommodations that are
available to the public on the basis of a commercial and business
enterprise, irrespective of whether or not membership is required
for use of the accommodations, except rooms and lodging rented for
a continuous period of more than 1 month. As used in this act,
"hotel" or "motel" means a building or group of buildings in which
the public may obtain accommodations for a consideration,
including, without limitation, such establishments as inns, motels,
tourist homes, tourist houses or courts, lodging houses, rooming
houses, nudist camps, apartment hotels, resort lodges and cabins,
camps operated by other than nonprofit organizations but not
including those licensed under 1973 PA 116, MCL 722.111 to 722.128,
and any other building or group of buildings in which
accommodations are available to the public, except accommodations
rented for a continuous period of more than 1 month and
accommodations furnished by hospitals or nursing homes.
(c) Except as provided in section 3b, interstate telephone
communications that either originate or terminate in this state and
for which the charge for the service is billed to a Michigan
service address or phone number by the provider either within or
outside this state, including calls between this state and any
place within or without the United States of America outside of
this
state. However, if the tax under this act is levied at a rate
of
6% before October 1, 2005, this subdivision does not apply to a
wide area telecommunication service or a similar type service, an
800 prefix service or similar type service, an interstate private
network and related usage charges, or an international call either
inbound or outbound. Beginning October 1, 2005, a wide area
telecommunication service or a similar type service, an 800 prefix
service or similar type service, an interstate private network and
related usage charges, or an international call either inbound or
outbound is taxed under this act in the same manner as interstate
telephone communications.
(d) The laundering or cleaning of textiles under a sale,
rental, or service agreement with a term of at least 5 days. This
subdivision does not apply to the laundering or cleaning of
textiles used by a restaurant or retail sales business. As used in
this subdivision, "restaurant" means a food service establishment
defined and licensed under the food law of 2000, 2000 PA 92, MCL
289.1101 to 289.8111.
(e) The transmission and distribution of electricity, whether
the electricity is purchased from the delivering utility or from
another provider, if the sale is made to the consumer or user of
the electricity for consumption or use rather than for resale.
(f) For a manufacturer who affixes its product to real estate
and maintains an inventory of its product that is available for
sale to others by publication or price list, the direct production
costs and indirect production costs of the product affixed to the
real estate that are incident to and necessary for production or
manufacturing operations or processes, as defined by the
department.
(g) For a manufacturer who affixes its product to real estate
but does not maintain an inventory of its product available for
sale to others or make its product available for sale to others by
publication or price list, the sum of the materials cost of the
property and the cost of labor to manufacture, fabricate, or
assemble
the property, but does not include the cost of labor
to cut, bend, assemble, or attach the property at the site for
affixation to real estate.
(h) Beginning October 1, 2005, the purchase, lease, or rental
of a copyrighted motion picture film or other charges for the right
to use a copyrighted motion picture film.
(2) If charges for intrastate telecommunications services or
telecommunications services between this state and another state
and other billed services not subject to the tax under this act are
aggregated with and not separately stated from charges for
telecommunications services that are subject to the tax under this
act, the nontaxable telecommunications services and other
nontaxable billed services are subject to the tax under this act
unless the service provider can reasonably identify charges for
telecommunications services not subject to the tax under this act
from its books and records that are kept in the regular course of
business.
(3) If charges for intrastate telecommunications services or
telecommunications services between this state and another state
and other billed services not subject to the tax under this act are
aggregated with and not separately stated from telecommunications
services that are subject to the tax under this act, a customer may
not rely upon the nontaxability of those telecommunications
services and other billed services unless the customer's service
provider separately states the charges for nontaxable
telecommunications services and other nontaxable billed services
from taxable telecommunications services or the service provider
elects, after receiving a written request from the customer in the
form required by the provider, to provide verifiable data based
upon the service provider's books and records that are kept in the
regular course of business that reasonably identify the nontaxable
services.
(4) As used in this section:
(a) "Fabricate" means to modify or prepare tangible personal
property for affixation or assembly.
(b) "Manufacture" means to convert or condition tangible
personal property by changing the form, composition, quality,
combination, or character of the property.
(c) "Manufacturer" means a person who manufactures,
fabricates, or assembles tangible personal property.