HB 5937 Summary

• Amends Michigan's use tax law (1937 PA 94) regarding exemptions for tangible personal property and services, effective retroactively to January 1, 2006.

• Expands the definition of taxable services to include intrastate and interstate telecommunications services, hotel and motel lodging, textile laundering services, and electricity transmission and distribution.

• Provides use tax exemption for property affixed to real estate in another state by manufacturers, regardless of whether sales or use tax was paid in the other state.

• Clarifies bundled transaction rules, stating that nontaxable services aggregated with taxable services are subject to tax unless the provider can separately identify nontaxable charges from books and records.

• Establishes comprehensive industrial processing exemptions for property used in manufacturing, research, quality control, equipment maintenance, and material handling when used by industrial processors or for ultimate use in industrial processing.