SB 887 (Brandenburg) was signed into law last week by Governor Snyder to stop forcing contractors to audit their customers Use Tax liabilities. Previously, contractors were liable for Use Tax on owner supplied materials unless the contractor could prove to the Department of Treasury that the contractor’s customer paid Sales Tax on the items the customer supplied the contractor. This forced contractors into uncomfortable situations and, in some cases, when Sales Tax was never owed or when the contractor’s customer did not have adequate tax documentation, it created a significant and improper tax liability on the contractor.
With the enactment of SB 887, contractors can focus on doing the job they were hired to do and not on cumbersome paperwork and increased tax liabilities. SB 887 will also disallow what was believed to be rampant double taxation.
For more information, contact Dan Papineau at email@example.com.