Rep. Pamela Hornberger’s solution to help schools, non-profits and certain businesses execute the tax-exempt purchases they are entitled to under state law won final legislative approval today in the Michigan House.
The legislation allows a qualified buyer who does not claim the sales and use tax exemption at the time of purchase to file for a refund with the state Treasury. The exemption is not always claimed at the time of purchase, which creates an administrative burden under current law – especially for sellers, who don’t benefit from the tax-exempt transaction.
“This plan eliminates hassles and streamlines the process for claiming refunds,” said Hornberger, of Macomb County’s Chesterfield Township. “It’s another example of making Michigan a better and less complicated place to do business.”
Michigan law already allows nonprofits and certain businesses – including many schools, churches and some agricultural producers — to claim a sales and use tax exemption on purchases of tangible personal property.
Under Hornberger’s legislation, buyers who don’t claim the exemption at the time of purchase would need an exemption certificate and a record of the sale to qualify for the refund from Treasury.
Hornberger is a main sponsor of the legislation along with Rep. Sue Allor of Wolverine.
House Bills 5620-21 are headed to Gov. Rick Snyder for his consideration after overwhelming approval in the Legislature.