MI HB5255

Clarifies that the use tax exemption for industrial processing applies to property used to convert or condition tangible personal property if the finished product is subject to sales tax or use tax.

Adds language specifying that industrial processing includes activity where property is "used for a purpose that subjects the property to the tax under this act" in the definitions of "industrial processing" and "industrial processor."

Exempts property that becomes an ingredient, component part, or structural part of finished products intended for sale or taxable use from the use tax in industrial processing activities.

Establishes that the exemption applies only to the extent property is used for exempt purposes, with the percentage of exempt use determined by a reasonable formula or method approved by the department.

Clarifies that the act's amendments reflect the original intent of existing law regarding use tax treatment of industrial processing activities.