Michigan Administrative Code › Department - Treasury › Bureau of Tax & Economic Policy › General Sales and Use Tax Rules › SPECIFIC SALES AND USE TAX RULES › Section R. 205.87 - Hospitals

Current through Vol. 24-12, July 15, 2024
Rule 37.
(1)
				  Sales, not for resale, of tangible personal property to hospitals not operated
				  for profit, are not taxable. A "hospital," for the purpose of this rule, means
				  only a separately organized institution or establishment, the primary purpose
				  of which is to provide medical, obstetrical, psychiatric, or surgical attention
				  and nursing to persons requiring the same. The sales tax exemption for sales to
				  a hospital which is not operated for profit does not apply to an institution,
				  establishment, or organization that is not a hospital as defined above,
				  notwithstanding the fact that it may not be operated for profit. "Not operated
				  for profit" means that the income or benefit from the operation of the hospital
				  does not inure, in whole or in part, to individuals or private shareholders,
				  directly or indirectly, and that the activities of the entity or agency are
				  carried on exclusively for the benefit of the public at large, and are not
				  limited to the advantage, interests, and benefits of its members or a
				  restricted group.
(2) If an
				  exemption is claimed, then, at the time of transfer of the tangible personal
				  property, the seller shall retain, as part of the seller's records, an executed
				  exemption certificate which reads as follows:
CERTIFICATE TO BE EXECUTED WHEN TAX EXEMPT SALE IS MADE TO
					 AN EXEMPT INSTITUTION OR AGENCY
The undersigned hereby certifies that the item or items
					 being purchased are to be used or consumed in connection with the operation of
					 the exempt institution or agency named in the space provided below and that the
					 consideration for the purchase moves from the funds of the designed institution
					 or agency. In the event this claim is disallowed, the transferee promises to
					 reimburse the seller for the amount of tax involved.
Date __________________
_________________________________________________
Name of exempt institution or agency
_________________________________________________
Signature and title of person making certification
(3) A hospital claiming an exemption shall
				  prove by its articles of association and bylaws that it is not directly or
				  indirectly operated for profit, and that its income and assets may not inure,
				  in whole or in part, directly or indirectly, to the benefit of any individuals,
				  members, or private shareholders whatsoever. A copy of the articles of
				  association and bylaws shall be submitted to the revenue division of the
				  department of treasury for determination as to whether the hospital is entitled
				  to the exemption.
(4) Sales by
				  hospitals which are taxable retail sales include, but are not limited to, the
				  following:
(a) Meals sold to visitors and
				  employees.
(b) Nonprescription
				  drugs, nonprescription medicines, and supplies sold to patients, doctors,
				  employees, and the general public for consumption off the premises.
(c) Sales of cosmetics, souvenirs, and other
				  similar merchandise.