Legislation that would allow for a purchaser to directly apply for a sales/use tax refund from the Michigan Department of Treasury is expected to be reported from the House Tax Policy Committee this week. This is good news, especially since Michigan is one of only three states that requires a purchaser to go through a seller to get their overpayment back in the form of a refund.
Currently, purchasers who mistakenly pay Sales or Use Tax when they were not supposed to have no ability to get their money back from the Department of Treasury directly. This package of bills - HB 5260 (Hornberger) and HB 5261 (Allor) - will allow them to do so. Being able to file a claim for refund for tax overages is fundamental to a properly functioning tax system and these Chamber-supported bills will allow taxpayers the ability to get their money back.
In related news, SB 887 (Brandenburg) was introduced last week to ensure contractors are not held liable for sales tax on items they install for their customers. If a contractor only provides the service of installing items or equipment provided to them by their customer, then the contractor should not be liable for any tax.
Currently, Treasury is forcing contractors to prove their customer paid sales tax on items the contractor only installs for them. If a contractor cannot prove their customer paid sales tax, then they are responsible for paying use tax. SB 887 will remove this burden on the contractor and force Treasury to enforce the tax law themselves. The Michigan Chamber supports this legislation and will testify on its merits in Committee later this week.
For more information on these tax bills, please contact Dan Papineau at email@example.com