Section 205.104b - Exemption claimed by purchaser.
USE TAX ACT (EXCERPT)
Act 94 of 1937
205.104b Exemption claimed by purchaser.
Sec. 14b.
(1) If an exemption from the tax under this act is claimed, the seller shall obtain identifying information of the purchaser and the reason for claiming the exemption at the time of the purchase or at a later date. The seller shall obtain the same information for a claimed exemption regardless of the medium in which the transaction occurred.
(2) A seller shall use a standard format for claiming an exemption electronically as adopted by the governing board under the streamlined sales and use tax agreement.
(3) A purchaser is not required to provide a signature to claim an exemption under this act unless a paper exemption form is used.
(4) A seller shall maintain a proper record of all exempt transactions and shall provide them when requested by the department.
(5) A seller who complies with the requirements of this section is not liable for the tax under this act if a purchaser improperly claims an exemption. A purchaser who improperly claims an exemption is liable for the tax due under this act. This subsection does not apply if a seller does any of the following:
(a) Fraudulently fails to collect the tax.
(b) Solicits a purchaser to make an improper claim for exemption.
(c) Accepts an exemption form when the purchaser claims an entity-based exemption if both of the following occur:
(i) The subject of the transaction sought to be covered by the exemption form is actually received by the purchaser at a location operated by the seller.
(ii) The state in which the location operated by the seller is located provides an exemption form that clearly and affirmatively indicates that the claimed exemption is not available in that state.
(6) A seller who obtains a fully completed exemption form or captures the relevant data elements as outlined in this section within 120 days after the date of sale is not liable for the tax under this act.
(7) If the seller has not obtained an exemption form or all relevant data elements, the seller may either prove that the transaction was not subject to the tax under this act by other means or obtain a fully completed exemption form from the purchaser, by the later of the following:
(a) 120 days after a request by the department.
(b) The date an assessment becomes final.
(c) The denial of a claim for refund.
(d) In the instance of a credit audit, the issuance of an audit determination letter or informal conference decision and order of determination.
(e) The date of a final order of the court of claims or the Michigan tax tribunal, as applicable, with respect to an assessment, order, or decision of the department.
(8) The department may, in its discretion, allow a seller additional time to comply with subsection (7).
(9) A seller is not liable for the tax under this act if the seller obtains a blanket exemption form for a purchaser with which the seller has a recurring business relationship. Renewals of blanket exemption forms or updates of exemption form information or data elements are not required if there is a recurring business relationship between the seller and the purchaser. For purposes of this section, a recurring business relationship exists when a period of not more than 12 months elapses between sales transactions.
History: Add. 2004, Act 172, Eff. Sept. 1, 2004 ;-- Am. 2008, Act 439, Imd. Eff. Jan. 9, 2009