After an unexpectedly longer and more complicated journey through the State Legislature, a four-bill package (HB 5173, HB 5164, SB 566 and SB 567) to re-exempt” dental prosthetics from sales/use tax was sent to the Governor last week for final approval. The Governor has indicated he will sign the bills.
Since 1985, dentists and dental labs have relied on guidance from the Michigan Department of Treasury who determined that dental prosthetics were not subject to sales/use tax. Abruptly, in June of 2017, the Department rescinded this guidance and instructed dentists that they had to pay tax on items purchased from dental labs, such as crowns and bridges. Additionally, dental labs had to become tax collectors.
The Chamber acted swiftly and shepherded legislation through the process to re-exempt dental prosthetics from the sales/use tax. In addition, the Chamber negotiated a tax benefit to dental labs creating a win-win for all parties. If you are a dentist that paid sales tax from July 1st through today, please consult your tax professional to seek a refund.
For more information, contact Dan Papineau, Director of Tax Policy for the Michigan Chamber, at firstname.lastname@example.org.