Two Packages of bills were introduced last week to exempt personal protection equipment (PPE) from sales and use tax.
HB 6033 and HB 6034 creates a sales and use tax exemption for personal protection equipment (PPE) and/or disinfecting supplies. In order to receive the exemption, an employer must submit a “COVID-19 Safety Protocol Plan” to the State. The COVID-19 Safety Protocol Plan must:
- Comply with all laws and executive orders.
- Is consistent with best practices for infection prevention and industrial hygiene.
- Promotes remote work to the fullest extent possible.
- Implements enhanced cleaning, screening, testing, and contract tracing procedures and any additional infection-control measures that are reasonable in light of the work performed at the worksite and the rate of infection in the surrounding community.
SB 1026 and SB 1027 creates a similar exemption but only applies to PPE. Additionally, the bills do not require employers to submit any type of plan or documentation to be eligible for the exemption.
In addition to these sales and use tax bills, HB 6035 was introduced to provide businesses a tax credit for the value of PPE purchased throughout the tax year. The credit is only eligible to businesses that increased the number of employees throughout the tax year by at least 10% and the average wage paid by the employer exceeds the regional average wage for that year. A business who retained the same number of employees will be able to take a 50% credit.
All five of these bills will be sent to the Michigan Chamber’s Tax Policy Advisory Committee for feedback.
For more information on these tax proposals please contact Dan Papineau at dpapineau@michamber.com.