SB-0658, As Passed House, December 19, 2014

SUBSTITUTE FOR

SENATE BILL NO. 658

A bill to amend 1933 PA 167, entitled

"General sales tax act,"

(MCL 205.51 to 205.78) by adding section 2b.

THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

Sec. 2b. (1) A seller who sells tangible personal property to

a purchaser in this state is presumed to be engaged in the business

of making sales at retail in this state 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.

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.

(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.

(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 be engaged in

the business of making sales at retail of tangible personal

property in this state 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 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 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. 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

purposes of subsection (3).

(7) As used in this section:

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

Senate Bill No. 658 (S-3) as amended December 19, 2014

(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].