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Rules committee clears path for sales, use tax rules update

The Michigan capitol building against a blue and cloudy sky.
Lester Graham
Michigan Radio
A committee made up of members from both houses of the legislature have cleared the way to update tax policies which have not been updated since the 1970s.

The legislative committee in charge of overseeing Michigan's rulemaking process has cleared the way for new sales and use tax policies to take effect.

The Joint Committee on Administrative Rules, known as JCAR, waived the rest of a waiting period Thursday before the changes could be filed with the state Secretary of State.

The changes would add two rules and rescind or amend about 75 more.

JCAR chair, Representative Jim Haadsma (D-Battle Creek), said the old rules haven’t been updated since the 1970s, leaving them out of step with current law.

“We’re trying to make sure that those who might be subject to sales or use taxes aren’t misled by some outdated rules in context of existing statutes and existing state appellate bodies’ holdings,” Haadsma said.

Three Republican members voted no on advancing the rules.

During Thursday’s meeting, Sen. Lana Theis (R-Brighton) expressed concerns about potential confusion over definitions.

“I have concerns that because this is so expansive that there are a lot of organizations that this will touch who haven’t yet had the opportunity to see the final product. And that raises significant concerns because it’s so broad. It literally describes the taxation of guinea pigs,” Theis said.

The state Department of Treasury says the rule updates are largely in name only, with any administrative code changes only reflecting existing state statute or court rulings. Department representatives say no new taxes would result from the difference.

Amanda West is the director of legislative affairs for the Michigan Department of Treasury.

She said it took around six years to get the proposed updates to reflect that.

“That process included meetings with the Michigan Chamber of Commerce, the Association of CPAs, the manufacturers, the retailers, the State Bar of Michigan, and it included an iterative process of drafting, sharing comments, having meetings to discuss issues or areas of disagreement,” West said.

West added, during that time, the department was able to quell everyone’s concerns. She mentioned no one objected to the final draft proposal of the rules.

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