Michigan – General Sales Tax and Use Tax Amendments

SALT Report 1999 – The Michigan State Legislature recently passed a bill, SB 264, that amends the state’s Use Tax Act and the General Sales Tax Act. The amendments modify how and when retailers will be required to remit the taxes they have collected to the Department of Treasury.  Under current law, taxpayers must pay, by the 20th day of the month, an amount equal to 50% of its sales or use tax liability accrued in the same month of the previous year or 50% of the actual liability for the month being reported, whichever is less.

However, beginning January 1, 2014 business will be required to remit, on a monthly basis, an amount equal to 75% of the tax liabilities accrued in the preceding month. Taxpayer will also be required to make a reconciliation payment by the 20th day of the month, if the prior month’s tax payment was insufficient.  The Bill also provides that under certain conditions taxpayers can make a consolidated use tax and sales tax payment.

The Bill also amends the state’s Use Tax Act and will require that a taxpayer’s monthly use tax payment be equal to 75% of the taxpayer’s use tax liabilities accrued in the previous month or 75% of its liability for the same month in the previous calendar year, whichever is less.  A monthly reconciliation payment will be required if the taxpayer underestimates its tax liabilities.

The provisions of this Bill apply to businesses with a total tax liability of $720,000 or more incurred during the previous calendar year.

For Further Information:

Michigan State Legislature – Senate Bill 264