Use Tax on Services is Repealed: Senate Bill 845 Provides Guidance in the Event the Use Tax Was Collected Prior to the Repeal
The Michigan Use Tax on Services was not repealed until after the new tax had gone into effect. Senate Bill 845, which has passed bot houses of the legislature, provides guidance in the event a service provider collected the tax.
If a person providing one or more of the services that became taxable on December 1, 2007 by enactment of Public Act 93 of 2007 charges and collects the tax; that person can either refund the tax to the customer or remit the tax to the Department of Treasury.
If a person has been charged the tax and paid the tax to a service provider and the service provider has not refunded the tax; the customer can claim a refund of the tax from the Department of Treasury.
A service provider is subject to penalties if the tax was charged and collected but not remitted to the Department of Treasury.
Senate Bill 845 prohibits the Department of Treasury from collecting the tax unless the service provider collected the tax and did not refund it to the customer.
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