Chamber-Backed Bills to Streamline Sales/Use Tax Refunds Introduced in State House

February 26, 2018

Two Chamber-backed bills - HBs 5260 and 5261 - were introduced in the State House last week that would allow for a purchaser to directly apply for a sales/use tax refund from the Michigan Department of Treasury. This is good news, especially since Michigan is only one of three states that requires a purchaser to go through a seller to get their overpayment back in the form of refund.

Consider this example:

A small manufacturer purchases a condenser to control emissions in their factory from ABC Equipment. The manufacturer installs the condenser and realizes that sales tax was paid on the condenser even though the purchase was a tax-exempt transaction covered under the pollution control equipment exemption per PA 451 of 1994. Under current law, the manufacturer would have to ask ABC Equipment to get their sales tax refund from the Department of Treasury for them. The manufacturer cannot ask the Department for the refund directly. This is problematic to say the least. 

HB 5260 and HB 5261 provide a simple and fair process for a purchaser to get the refund for the overpayment directly from the Department of Treasury. 

For more information, contact Dan Papineau, Director of Tax Policy for the Michigan Chamber, at