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SB 416

AN ACT RELATING TO TAXATION -- SALES AND USE TAXES -- LIABILITY AND COMPUTATION

2025 Regular Session Introduced by Pete Appollonio and 4 co-sponsors

Allows micro brewers to use the purchaser’s MLCC license number to satisfy identifying information for use‑tax exemption claims, easing recordkeeping.

05/29/2025 Committee recommended measure be held for further study
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WeVote Research Nonpartisan
Bill Summary · SB 416

Summary — SB 416 (Michigan) — Use Tax: identifying information for exemptions; micro brewers added

Status: Enacted as Public Act 61 of 2024 (approved June 20, 2024). Amends the Use Tax Act (1937 PA 94), sections 14a and 14b (MCL 205.104a & 205.104b). Tie‑barred with SB 415 (sales tax counterpart).

Purpose / Intent

To streamline documentation required when a seller claims a resale/use‑tax exemption for sales of alcoholic liquor to another licensed liquor business by allowing a purchaser’s Michigan Liquor Control Commission (MLCC) license number to satisfy the “identifying information” requirement — and to extend that streamlined verification to sellers licensed as micro brewers. The change aligns micro brewers with wholesalers and authorized distribution agents for use‑tax exemption recordkeeping.

Key provisions

  • Adds “micro brewer” to the list of sellers for which obtaining the purchaser’s MLCC license number satisfies the identifying‑information requirement for claiming a use‑tax exemption (MCL 205.104b(1) / sec. 14b).
  • Clarifies that when the required MLCC license number (and other required information) is maintained, an exemption certificate or additional documentation is not required for exemption claims filed by those sellers (MCL 205.104a(6) / sec. 14a).
  • Retains existing recordkeeping, audit, and seller‑liability rules:
    • Sellers must keep accurate records (inventories, sales records, receipts, invoices) and retain them per statute.
    • A seller who complies with the information/recordkeeping requirements is shielded from tax liability if a purchaser improperly claims an exemption, except where the seller commits fraud, solicits improper claims, or otherwise knowingly accepts improper exemption claims.
    • Existing administrative provisions (e.g., use of standard electronic formats, 120‑day cure period for capturing exemption data) remain in force.
  • “Micro brewer” is the MLCC‑defined term (see Michigan Liquor Control Code section defining brewers that manufacture less than 60,000 barrels per year, etc.).

Who is affected

  • Primary: micro brewers licensed by the MLCC who sell alcoholic liquor to other MLCC licensees (retailers, restaurants, bars, etc.).
  • Secondary: wholesalers, MLCC authorized distribution agents (already covered), purchasers who are MLCC licensees, the Department of Treasury (audits/enforcement), and MLCC.
  • Impact: reduces administrative burden on micro brewers and their customers when claiming resale/use tax exemptions; aligns documentation rules across classes of liquor sellers.

Fiscal and procedural notes

  • Nonpartisan committee analyses reported no fiscal impact to state or local government.
  • The bill was tie‑barred with SB 415 (sales tax counterpart) and was enacted as Public Act 61 of 2024 (filed with the Secretary of State June 20, 2024).

Compiled from official sources — confirm details with the bill’s official record.

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