SALES AND USE TAXATION OF ENERGY SUPPLIED TO PUBLIC ASSISTANCE RECIPIENTS

(Replaces Revenue Administrative Bulletin 1988-37)

RAB-92-1. This bulletin sets out the guidelines to be used by energy providers to determine the taxability of energy sales to public assistance recipients. It clarifies and simplifies the guidelines originally set out in Revenue Administrative Bulletin 1988-37.

The Michigan Department of Treasury has established the following guidelines for the taxation of energy sold to Michigan Department of Social Services public assistance recipients. These guidelines are applicable to all energy transactions commencing on or after January 1, 1992.

GUIDELINES

Taxable Sales

Sales of energy to public assistance recipients, where the recipient pays the bill, are taxable. This includes payments made by:

1. Government warrants/checks made payable to the recipient, and
2. Energy draft transactions (energy drafts are always issued in the name of the recipient).

Sales of energy in the form of electricity, natural or artificial gas, or steam are taxable regardless of whether payment is received from the recipient or from the Department of Social Services.

Sales of energy in the form of wood, home heating fuel (oil), propane, or kerosene are taxable unless all provisions of the following section titled "Nontaxable Sales" are satisfied.

Nontaxable Sales

A supplier of energy to a public assistance recipient will not be liable for sales tax if all the following conditions are met:

1. The sale is for wood, home heating fuel (oil), propane, or kerosene.
2. Payment is made by the Michigan Department of Social Services directly to the supplier by warrant on government funds made payable to the supplier.
3. The supplier has received Michigan Department of Social Services authorization on form DSS-849 to provide the energy.

IF THE FOLLOWING INDICATIONS OF AUTHORIZATION DO NOT APPEAR ON FORM DSS-849, THE SALE IS SUBJECT TO TAX.

On the current version of the form, authorization consists of the words "emergency payments" written in the empty box directly below box 17 of the form. A sample copy of the current form is attached to this bulletin.

Form DSS-849 is being revised. It is anticipated that such authorization on the revised form will consist of a mark in a check-off box next to a notation reading "Emergency Assistance SER/other" on line 17a of the form. The final version of the form may have a slightly different appearance. The revised version of the form will be phased into use as the existing stock of the current form is exhausted.

Address specific questions about these guidelines to:

Sales, Use and Withholding Taxes Division
Michigan Department of Treasury
Treasury Building
Lansing, Michigan 48922
Phone: (517) 373-3190

NOTE: A sample copy of form DSS-849 is not available via our Internet website. If you require a copy of this form, please contact the Sales, Use and Withholding Taxes Division at the address or phone number above.