Many Michigan businesses are well aware of the Andrie, Inc. V. Department of Treasury case that really muddied the waters on how taxpayers claim an exemption from Use Tax because the Sales Tax was already paid. It has been over three years since the Supreme Court reversed the Court of Appeals decision in Andrie and, unfortunately, the controversy surrounding who owes what tax continues.
The Michigan Chamber is seeing more and more audits that are holding installers responsible for sales/use tax on items they were contracted only to install. An installer, given tangible personal property to install, assumes sales/use tax was already paid on that item. Fast forward to audit and now the installer is being asked to prove their customer fulfilled the tax liability. This often results in the installer being charged sales/use for the items they installed.
If this sounds like something that has happened to you, or for questions on this emerging issue, please contact Dan Papineau, Director of Tax Policy, at firstname.lastname@example.org.