Date: Wed, 5 Dec 2007 10:58:06 -0500
Subject: Use Tax on Select Services Repealed

Use Tax on Select Services Repealed

Governor Jennifer M. Granholm signed HB 5408 into law (PA 145 of 2007 ) on December 1, 2007. The law creates a business tax surcharge that replaces a service tax enacted as part a compromise budget solution earlier in the year.

The Michigan Department of Treasury is alerting businesses that collected the 6% Use Tax for select services, that they have an option on how to handle any monies collected, given the repeal of the tax. Businesses that charged and collected the use tax on services, before the law was repealed on December 1st, can either refund that money to the purchaser/user of the service or remit the revenue to the State of Michigan, when the first Use Tax payment is due. For many businesses, that payment is scheduled to be remitted by January 20, 2008.

The extension of the Use Tax to select services was repealed on December 1st, just hours after it went into effect. Given that repeal, businesses have the option noted above.

Part of the deal to repeal the use tax on select services includes an agreement to pass legislation that will hold businesses harmless if they didn't collect the use tax on Saturday, December 1.