Government Affairs

SALES TAX ON CORES EXCLUDED EFFECTIVE MARCH 29, 2017

Governor Snyder Approves Michigan SB 991

to Excluded Sales Tax on Cores

 

Governor Synder approved Michigan Senate Bill 991 on 01/05/17. The bill was filed with the Secretary of State on 01/09/17 and assigned to PA 515 and 516 of 2016. The Governor passed the bill "without immediate effect", resulting in an effective date of March 29, 2017.

 

Michigan SB 991 amends the General Sales Act to exclude from taxation, and excludes from the defination of "sales price" a core charge attributable to a recycling fee, deposit, or disposal fee for a motor vehicle or recreational vehicle or battery.

 

The Act, in place since 1937 and until March 29, 2017 imposed a tax of 6% on the sale price of nonexempt personal property. The Act defines "sales price" as the total amount of consideration, including cash, credit, property, and services, for which tangible personal property or services are sold, leased, or rented, valued in money, whether received in money or otherwise. The Act lists certain cost, charges, and amounts that are included in the term, and others that are not.

 

There has been debate within the State of Michigan Department of Treasury of when the actual "effective date" for this exemption of sales tax on cores would become effective due to the way SB 991 was written. The bill was written with effective date of January 1, 2017, however the Governor signed the bill "without immediate effect" which means the bill takes effect 90 days after the end of the 2016 session.

 

The State of Michigan Department of Treasury "Notice to Taxpayers Regarding 2016 PA 515 and 516 (Core Charges)" issued January 25, 2017 with date clarification for when sales tax on cores becomes exempt. That effective date, per the State of Michigan Department of Treasury Notice is March 29, 2017

 

The Governor also approved HB 5928 which is a companion bill to SB 991 relating to Use Tax on cores.

 

Thank you MAPA members, the automotive repair industry, other automotive associations, legislators and Governor Snyder for supporting and getting Senate Bill 991 approved.

 

Notice To Taxpayers Regarding 2016 PA 515 and 516 (Core Charges)

SB 991 Regarding 2016 PA 515 (Core Charges)

HB 5928 Regarding 2016 PA 516 (Use Tax-Core Charges)

 

 


 

 

 

 

 

 

GRASSROOTS UPDATE

 

June 17, 2016

 

MAPA Members and Colleagues,

 

WE DID IT!

 

On Thursday, June 16th Governor Rick Snyder vetoed HB 4344!  In a statement released by the Governor’s office, Snyder echoes several of the aftermarkets concerns with the bill saying “On its face, this policy [HB 4344] seems to be intended to protect consumers and ensure vehicles are safely repaired. That is a laudable goal. However, this bill … limits the use of safe, high-quality aftermarket parts designed specifically for particular vehicles.” 

 

The Governor also commented the bill would have "negatively affected market competition and driven up consumer costs for replacement parts on motor vehicles."  In his veto letter, Governor Snyder said he supported parts of HB 4344 but not those affecting which kinds of parts facilities could use on vehicles.

 

Rep. Peter Pettalia, (R-Presque Isle), the bill sponsor, said he doesn't blame the governor for the veto and does not plan to seek an override vote when the Legislature returns to a normal session schedule in September despite having had enough support to do so when the bill cleared the Legislature. "The parties that were involved became greedy and they were all asking for too much, so at the end of the day it's going to be status quo and nobody gets anything," Mr. Pettalia said. He said the bill originally sought to modernize mechanic certification and repair facility licenses, which have gone without changes for about 40 years. The bill had bounced between the House and Senate. He admitted he was not comfortable with it when it came back from the Senate, but made further revisions in the House and was comfortable with the language ultimately sent to the governor. "It will most likely come back and make a (secretary of state) fix and let it go," Mr. Pettalia told Gongwer News Service on June 16th.

CLICK HERE TO VIEW THE FULL PRESS RELEASE

The Michigan Automotive Parts Association (MAPA) was involved in the first ever “Michigan Automotive Aftermarket Industry Lobby Day” held on May 24th at the State Capitol in Lansing to voice our opposition of HB 4344. Thank you to those who attended, it was an overwhelming success. Collectively, we met with 26 members of the Michigan House of Representatives to oppose HB 4344.  We got the bill off the calendar that week, and received a commitment from the bill sponsor (Rep. Peter Pettalia) that the Senate version would not pass the House. Your presence in Lansing made a huge difference!

 

MAPA was also represented in a June 6th meeting with Dick Posthumus, Senior Advisor to the Governor, to ask Governor Snyder to veto HB 4344.  The former Lt. Governor is the head of Governor Snyder’s Legislative Affairs team who reviewed the bill before it was given to the Governor for his consideration.

 

This is a huge victory for the automotive aftermarket in Michigan!  This harmful legislation could not have been defeated without your help.  Together, we have shown the car companies that big money doesn’t always win.

 

Thank you all for responding to our “call to action” by participating in our grassroots and lobbying efforts. Your participation helped to protect our industry!

 


 

 

LEGISLATIVE UPDATE

June 17, 2016

 

MICHIGAN SB 991 EXCLUDES SALES TAX ON CORES

 

If passed, Michigan SB 991 would amend the General Sales Tax Act to exclude from taxation a core charge attributable to a recycling fee, deposit, or disposal fee for a motor vehicle or recreational vehicle or battery.

 

The Act, imposes a tax of 6% on the sales price of nonexempt personal property. The Act defines “sales price” as the total amount of consideration, including cash, credit, property, and services, for which tangible personal property or services are sold, leased, or rented, valued in money, whether received in money or otherwise. The Act lists certain costs, charges, and amounts that are included in the term, and others that are not.

 

The bill would exclude from the definition of “sales price” a core charge attributed to a recycling fee, deposit, or disposal fee for a motor vehicle or recreational vehicle part or battery.

 

Per Michigan Senate Bill No. 991;

 

“.. Sales price includes the following subparagraphs (i) through (viii) and excludes subparagraphs (viii) through (xiii): … “(xiii) A CORE CHARGE ATTRIBUTABLE TO A RECYCLING FEE, DEPOSIT, OR DISPOSAL FEE FOR A MOTOR VEHICLE OR RECREATIONAL VEHICLE PART OR BATTERY.”

 

MI SB 991 was introduced on May 25, 2016, was referred to Committee of the Whole on June 8, 2016 and is now on the Senate floor.  A copy of the bill is attached for your review and sharing.

 

Prior to the introduction of this bill, MAPA assisted Senator Curtis Hertel, Jr’s office with a survey related to the amount of sales tax on cores charged/collected in the State of Michigan.  The numbers provided to Hertel’s office were gathered from a portion of MAPA members. Thank you to those who participated.

 

MAPA encourages you to email your senator and encourage them to pass SB 991. To find your senator, please visit: http://www.senate.michigan.gov/fysbyaddress.html

 


 

   

Links to Legislature websites

 

Michigan House:  http://house.michigan.gov/home.asp

 

Michigan Senate: http://www.senate.michigan.gov/default.html

   

        
   
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