Michigan – Exemption for Property Affixed to Out-of-State Real Estate

SALT Report 2014 – The Michigan State Legislature passed a bill that provides a use tax exemption for property purchased or manufactured by a taxpayer who is constructing, altering, repairing, or improving real estate.  Qualified property must be permanently affixed to and made a structural part of real estate that is located in another state. The exemption is not dependent upon whether sales or use tax was due or paid in the state in which the real estate is located.

Further, the bill amends the definitions of industrial processing and industrial processor to include activities that involve property that is affixed to and made a structural part of real estate located in another state. The bill states that this property would be eligible for the industrial processing exemption.

The provisions of HB 5937 are retroactive to January 1, 2006.

For Further Information:

Michigan State Legislature – HB 5937, Act 474 Laws 2012