Michigan Administrative Code › Department - Treasury › Bureau of Tax & Economic Policy › General Sales and Use Tax Rules › SPECIFIC SALES AND USE TAX RULES › Section R. 205.62 - Aircraft

Current through Vol. 24-12, July 15, 2024
Rule 12.
(1)
				  Except for exempt sales under section
				  4 x of the General Sales Tax Act,
				  1933 PA 167, MCL
				  205.54x, and sales to a purchaser
				  that has made a valid lessor election under section
				  5(4) of the Use
				  Tax Act, 1937 PA 94, MCL
				  205.95, sales of new and used
				  aircraft are subject to sales tax on the full selling price without deductions
				  for expenses incurred as part of the cost of doing business or trade-in credit
				  given to a purchaser. To make a valid election under section
				  5(4) of the Use
				  Tax Act, 1937 PA 94, MCL
				  204.95, a lessor of an aircraft
				  must register for use tax by the earlier of the date set for the first payment
				  of use tax under the lease or rental agreement or 90 days after the lessor
				  first brings the aircraft into this state.
(2) Unless exempt under section
				  4 x of the General Sales Tax Act,
				  1933 PA 167, MCL
				  205.54x, gasoline, jet fuel, oil,
				  repair parts, and other tangible personal property sold and delivered in this
				  state for operation of aircraft are subject to sales tax regardless of where
				  the plane will be flown or used.
(3) A seller in the ordinary course of
				  business, including an aircraft dealer engaged in the purchasing, selling,
				  brokering, exchanging, or dealing in aircraft parts or in aircraft of a type
				  required to be registered under the Aeronautics code of the state of Michigan,
				  1945 PA 327, MCL
				  259.1 to
				  259.208, shall remit sales tax on
				  the full sales price of an aircraft, regardless of whether the sales are on its
				  own behalf or on behalf of the aircraft owner.
(4) Aircraft purchased for consumption or use
				  in this state from sellers outside this state are subject to use tax.
(5) A dealer, as that term is defined in
				  section 3 of the Aeronautics code of the
				  state of Michigan, 1945 PA 327, MCL
				  259.3, that uses the property
				  solely for demonstration and for which no charge is made while holding it for
				  sale is exempt from tax on account of such use.
(6) When an aircraft used for demonstration
				  is converted to a taxable use, such as for personal use, use tax is owed on the
				  dealer's original purchase price, if the aircraft was converted to a purpose
				  other than selling, brokering, exchanging, or dealing in aircraft parts or in
				  sales of aircraft.
(7) Sales tax
				  applies to the retail sale of the aircraft following its use for demonstration
				  without deduction for use tax previously paid under subrule (6) of this
				  rule.
(8) A specific tax under the
				  streamlined sales and use tax revenue equalization act, 2004 PA 175, MCL
				  205.171 to
				  205.191, of 6% is owed, less an
				  amount equal to the use tax paid, on the retail value of a qualified aircraft
				  for the privilege of storing, registering, or transferring ownership in this
				  state, unless exempt from sales or use tax, including for purposes of resale.
				  The retail value is determined at the time the aircraft first enters this state
				  and is to be based on an industry accepted pricing guide applicable to the
				  aircraft. It is solely within the department of treasury's discretion to
				  determine if a pricing guide is industry accepted. As used in this subrule,
				  "qualified aircraft" means an aircraft purchased outside of this state, used
				  solely for personal, non-business purposes, and either brought into this state
				  more than 90 days after the date of purchase by a nonresident or brought into
				  this state more than 360 days after the date of purchase by a
				  resident.