September 13, 2011, Introduced by Rep. Gilbert and referred to the Committee on Tax Policy.
A bill to amend 1967 PA 281, entitled
"Income tax act of 1967,"
by amending section 669 (MCL 206.669), as added by 2011 PA 38.
THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
Sec. 669. (1) All other receipts not otherwise sourced under
this part shall be sourced based on where the benefit to the
customer is received or, if where the benefit to the customer is
received cannot be determined, to the customer's billing address.
(2) For purposes of section 665(2), the benefit of a service
is considered received in this state and attributable to this state
as follows:
(a) 100% of the benefit of a service is received in this state
under any of the following circumstances:
(i) The service relates to real property that is located
entirely in this state.
(ii) The service relates to tangible personal property that is
either owned or leased by the purchaser and located in this state
at the time that the service is received or to tangible personal
property that is delivered to the purchaser or the purchaser's
designee in this state.
(iii) The service is provided to a purchaser who is an
individual physically present in this state at the time that the
service is received.
(iv) The services are received in this state and are in the
nature of personal services, such as consulting, counseling,
training, speaking, and providing entertainment, that are typically
conducted or performed first-hand, on a direct, one-to-one or one-
to-many basis.
(v) The service is provided to a purchaser that is engaged in
a trade or business in this state and relates only to the trade or
business of that purchaser in this state.
(vi) The service relates to the use of intangible property such
as computer software other than prewritten computer software,
licenses, designs, processes, patents, and copyrights, which is
used entirely in this state.
(vii) The services provided are professional in nature, such as
legal or accounting services, and are provided to a purchaser that
is an individual domiciled in this state, or to a purchaser with
business operations only in Michigan.
(b) A portion of the benefit of the service is in this state
and shall be apportioned to this state as follows:
(i) If the service relates to real property that is located in
this state and in 1 or more other states, the benefit of the
service is received in Michigan to the extent that the real
property is located in Michigan.
(ii) If the service relates to tangible personal property that
is owned or leased by the purchaser and located in this state and
in 1 or more other states at the time that the service is received,
or to tangible personal property that is delivered to the purchaser
or the purchaser's designee in this state and in 1 or more other
states, the benefit of the service is received in Michigan to the
extent that the tangible personal property is located in Michigan,
or is delivered to the purchaser or the purchaser's designee in
Michigan.
(iii) If the service is provided to a purchaser that is engaged
in a trade or business in this state and in 1 or more other states,
and the service relates to the trade or business of that purchaser
in this state and in 1 or more other states, the benefit of the
service is received in Michigan to the extent that it relates to
the trade or business of the purchaser in Michigan.
(iv) If the service relates to the use of intangible property
such as computer software other than prewritten computer software,
licenses, designs, processes, patents, and copyrights, which is
used in this state and in 1 or more other states, the benefit of
the service is received in Michigan to the extent that the
intangible property is used in Michigan.
(v) If the services provided are professional in nature, such
as legal or accounting services, and are provided to a purchaser
with business operations in Michigan and 1 or more other states,
and the services relate to the purchaser's operations both in
Michigan and in 1 or more other states, the benefit of the services
is received in Michigan to the extent that the services relate to
the purchaser's Michigan operations.
Enacting section 1. This amendatory act takes effect January
1, 2012.