SB-0659, As Passed Senate, December 19, 2014

 

 

 

 

 

 

 

 

 

 

 

SUBSTITUTE FOR

 

SENATE BILL NO. 659

 

 

 

 

 

 

 

 

 

 

 

 

     A bill to amend 1937 PA 94, entitled

 

"Use tax act,"

 

(MCL 205.91 to 205.111) by adding section 5a.

 

THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

 

     Sec. 5a. (1) A seller who sells tangible personal property is

 

presumed to have nexus with this state and shall register with the

 

department and collect the tax levied under this act 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 activities in this state:

 

     (a) Sells a similar line of products as the seller and does so

 

under the same business name as the seller or a similar business

 

name as the seller.

 

     (b) Uses its employees, agents, representatives, or


 

independent contractors in this state to promote or facilitate

 

sales by the seller to purchasers in this state.

 

     (c) Maintains, occupies, or uses an office, distribution

 

facility, warehouse, storage place, or similar place of business in

 

this state to facilitate the delivery or sale of tangible personal

 

property sold by the seller to the seller's purchasers in this

 

state for storage, use, or consumption in this state.

 

     (d) Uses, with the seller's consent or knowledge, trademarks,

 

service marks, or trade names in this state that are the same or

 

substantially similar to those used by the seller.

 

     (e) Delivers, installs, assembles, or performs maintenance or

 

repair services for the seller's purchasers in this state.

 

     (f) Facilitates the sale of tangible personal property to

 

purchasers in this state by allowing the seller's purchasers in

 

this state to pick up or return tangible personal property sold by

 

the seller at an office, distribution facility, warehouse, storage

 

place, or similar place of business maintained by that person in

 

this state.

 

     (g) Shares management, business systems, business practices,

 

or employees with the seller, or in the case of an affiliated

 

person, engages in intercompany transactions related to the

 

activities occurring with the seller to establish or maintain the

 

seller's market in this state.

 

     (h) Conducts any other activities in this state that are

 

significantly associated with the seller's ability to establish and

 

maintain a market in this state for the seller's sales of tangible

 

personal property to purchasers in this state for storage, use, or


 

consumption in this state.

 

     (2) The presumption under subsection (1) may be rebutted by

 

demonstrating that a person's activities in this state are not

 

significantly associated with the seller's ability to establish or

 

maintain a market in the state for the seller's sales of tangible

 

personal property to purchasers in this state.

 

     (3) In addition to the presumption under subsection (1), a

 

seller of tangible personal property is presumed to have nexus in

 

this state and shall register with the department and collect the

 

tax levied under this act if the seller enters into an agreement,

 

directly or indirectly, with 1 or more residents of this state

 

under which the resident, for a commission or other consideration,

 

directly or indirectly, refers potential purchasers, whether by a

 

link on an internet website, in-person oral presentation, or

 

otherwise, to the seller, if all of the following conditions are

 

satisfied:

 

     (a) The cumulative gross receipts from sales by the seller for

 

storage, use, or consumption in this state to purchasers in this

 

state who are referred to the seller by all residents of this state

 

with an agreement with the seller are greater than $10,000.00

 

during the immediately preceding 12 months.

 

     (b) The seller's total cumulative gross receipts from sales

 

for storage, use, or consumption to purchasers in this state exceed

 

$50,000.00 during the immediately preceding 12 months.

 

     (4) The presumption under subsection (3) may be rebutted by

 

demonstrating that the residents of this state with whom the seller

 

has an agreement did not engage in any solicitation or any other


 

activity within this state that was significantly associated with

 

the seller's ability to establish or maintain a market in this

 

state for the seller's sales of tangible personal property to

 

purchasers in this state for storage, use, or consumption in this

 

state. The presumption under subsection (3) shall be considered

 

rebutted by evidence of all of the following:

 

     (a) Written agreements prohibiting all of the residents with

 

an agreement with the seller from engaging in any solicitation

 

activities in this state on behalf of the seller.

 

     (b) Written statements from all of the residents with an

 

agreement with the seller stating that the resident representatives

 

did not engage in any solicitation or other activities in this

 

state on behalf of the seller during the immediately preceding 12

 

months, if the statements are provided and obtained in good faith.

 

     (5) An agreement under which a seller purchases advertisements

 

from a person or persons in this state to be delivered through

 

television, radio, print, the internet, or any other medium is not

 

an agreement described in subsection (3) unless the advertisement

 

revenue paid to the person or persons in this state consists of

 

commissions or other consideration that is based upon completed

 

sales of tangible personal property.

 

     (6) This section applies to transactions occurring on or after

 

the effective date of the amendatory act that added this section

 

and without regard to the date the seller and the resident entered

 

into an agreement described in subsection (3). The 12 months before

 

the effective date of the amendatory act that added this section

 

are included as part of the immediately preceding 12 months for


Senate Bill No. 659 (S-3) as amended December 19, 2014

 

purposes of subsection (3).

 

     (7) As used in this section:

 

     (a) "Affiliated person" means either of the following:

 

     (i) Any person that is a part of the same controlled group of

 

corporations as the seller.

 

     (ii) Any other person that, notwithstanding its form of

 

organization, bears the same ownership relationship to the seller

 

as a corporation that is a member of the same controlled group of

 

corporations.

 

     (b) "Controlled group of corporations" means that term as

 

defined in section 1563(a) of the internal revenue code, 26 USC

 

1563.

 

     Enacting section 1. This amendatory act takes effect October

 

1, [2015].