HOUSE BILL No. 4169

 

 

February 13, 2019, Introduced by Reps. Byrd and Kahle and referred to the Committee on Tax Policy.

 

     A bill to amend 1937 PA 94, entitled

 

"Use tax act,"

 

by amending section 4k (MCL 205.94k), as amended by 2012 PA 429.

 

THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

 

     Sec. 4k. (1) The tax levied under this act does not apply to

 

parts and materials, excluding shop equipment or fuel, affixed to

 

or to be affixed to an aircraft owned or used by a domestic air

 

carrier that is any of the following:

 

     (a) An aircraft for use solely in the transport of air cargo

 

or a combination of air cargo and passengers that has a maximum

 

certificated takeoff weight of at least 12,500 pounds for taxes

 

levied before January 1, 1997 and at least 6,000 pounds for taxes

 

levied after December 31, 1996.

 


     (b) An aircraft that is used solely in the regularly scheduled

 

transport of passengers.

 

     (c) An aircraft other than an aircraft described in

 

subdivision (b), that has a maximum certificated takeoff weight of

 

at least 12,500 pounds for taxes levied before January 1, 1997 and

 

at least 6,000 pounds for taxes levied after December 31, 1996, and

 

that is designed to have a maximum passenger seating configuration

 

of more than 30 seats and is used solely in the transport of

 

passengers.the use of an aircraft by a domestic air carrier if the

 

aircraft has a maximum certificated takeoff weight of at least

 

6,000 pounds and is used solely in the transport of air cargo,

 

passengers, or a combination of air cargo and passengers.

 

     (2) The tax levied under this act does not apply to the sale

 

of parts or materials, excluding shop equipment or fuel, affixed or

 

to be affixed to an aircraft. that meets all of the following

 

conditions:

 

     (a) The aircraft leaves this state within 15 days after the

 

sooner of the issuance of the final billing or authorized approval

 

for final return to service, completion of the maintenance record

 

entry, and completion of the test flight and ground test for

 

inspection as required under 14 CFR 91.407.

 

     (b) The aircraft was not based in this state or registered in

 

this state before the parts or materials are affixed to the

 

aircraft and the aircraft is not based in this state or registered

 

in this state after the parts or materials are affixed to the

 

aircraft.

 

     (3) The tax levied under this act does not apply to the sale


of an aircraft temporarily located in this state for the purpose of

 

a sale and prepurchase evaluation, customization, improvement,

 

maintenance, or repair if all of the following conditions are

 

satisfied:

 

     (a) The aircraft leaves this state within 15 days after the

 

sale and the completion of any prepurchase evaluation,

 

customization, improvement, maintenance, or repair that is

 

associated with the sale, whichever is later.

 

     (b) The aircraft was not based in this state or registered in

 

this state before the sale and any prepurchase evaluation,

 

customization, improvement, maintenance, or repair associated with

 

the sale is completed and the aircraft is not based in this state

 

or registered in this state after the sale and any prepurchase

 

evaluation, customization, improvement, maintenance, or repair

 

associated with the sale is completed.

 

     (4) For taxes levied after December 31, 1992, the tax levied

 

under this act does not apply to the storage, use, or consumption

 

of rolling stock used in interstate commerce and purchased, rented,

 

or leased by an interstate fleet motor carrier. A refund for taxes

 

paid before January 1, 1997 shall not be paid under this subsection

 

if the refund claim is made after June 30, 1997.

 

     (5) For taxes levied after December 31, 1996 and before May 1,

 

1999, the tax levied under this act does not apply to the product

 

of the out-of-state usage percentage and the price otherwise

 

taxable under this act of a qualified truck or a trailer designed

 

to be drawn behind a qualified truck, purchased, rented, or leased

 

in this state by an interstate fleet motor carrier and used in


interstate commerce.

 

     (6) As used in this section:

 

     (a) "Aircraft" means an aerial vehicle that is used in

 

aviation, other than an unmanned aerial vehicle.

 

     (b) (a) "Based in this state" means hangared or stored in this

 

state for not less than 10 days in not less than 3 nonconsecutive

 

months during the immediately preceding 12-month period.

 

     (c) (b) "Customization" means any improvement, maintenance, or

 

repair that is performed on an aircraft that is associated with the

 

sale of the aircraft.

 

     (d) (c) "Domestic air carrier" means a person engaged

 

primarily in the commercial transport for hire of air cargo,

 

passengers, or a combination of air cargo and passengers as a

 

business activity.

 

     (e) (d) "Interstate fleet motor carrier" means a person

 

engaged in the business of carrying persons or property, other than

 

themselves, their employees, or their own property, for hire across

 

state lines, whose fleet mileage was driven at least 10% outside of

 

this state in the immediately preceding tax year.

 

     (f) (e) "Out-of-state usage percentage" is a fraction, the

 

numerator of which is the number of miles driven outside of this

 

state in the immediately preceding tax year by qualified trucks

 

used by the taxpayer and the denominator of which is the total

 

miles driven in the immediately preceding tax year by qualified

 

trucks used by the taxpayer. Miles driven by qualified trucks used

 

solely in intrastate commerce shall not be included in calculating

 

the out-of-state usage percentage.


     (g) (f) "Prepurchase evaluation" means an examination of an

 

aircraft to provide a potential purchaser with information relevant

 

to the potential purchase.

 

     (h) (g) "Qualified truck" means a commercial motor vehicle

 

power unit that has 2 axles and a gross vehicle weight rating in

 

excess of 10,000 pounds or a commercial motor vehicle power unit

 

that has 3 or more axles.

 

     (i) (h) "Registered in this state" means an aircraft

 

registered with the state transportation department, bureau of

 

aeronautics or registered with the federal aviation administration

 

Federal Aviation Administration to an address located in this

 

state.

 

     (j) (i) "Rolling stock" means a qualified truck, a trailer

 

designed to be drawn behind a qualified truck, and parts or other

 

tangible personal property affixed to or to be affixed to and

 

directly used in the operation of either a qualified truck or a

 

trailer designed to be drawn behind a qualified truck.

 

     Enacting section 1. This amendatory act takes effect 90 days

 

after the date it is enacted into law.