skip to main content
X

Michigan Treasury Expands Applicability of Industrial Processing Exemption

Michigan Treasury Expands Applicability of Industrial Processing Exemption

The Department of Treasury has amended the sales and use tax provisions by expanding the manufacturing exemption to include certain industrial processing activities performed on some aggregate products or materials.

“Aggregate” is defined as “common variety building material,” to include:

  • Sand
  • Gravel
  • Crushed stone
  • Slag
  • Recycled concrete
  • Recycled asphalt
  • Geosynthetic aggregates

The legislation provides that machinery and equipment that performs an industrial processing activity on an aggregate product that will be used as an ingredient or component part for the construction, maintenance, repair, or reconstruction of real property is eligible for certain industrial processing exemptions. Machinery and equipment used in aggregate production will be exempt from sales and use tax if sales or use tax is paid on the aggregate product. Equipment used in processing aggregates includes:

  • Loaders
  • Feeders
  • Crushers
  • Screens
  • Conveyors
  • Dust control
  • Generators

Tax relief provided by the Acts will require Treasury to cancel all outstanding balances related to sales or use tax liabilities involving industrial processing activities and property described in the Acts. The tax liabilities are for outstanding “Notices of Intent to Assess” and “Final Assessments,” even if they are in an Informal Conference or on appeal before a court. In addition, Treasury is not allowed to issue any new assessments for tax periods occurring before May 8, 2023. The Acts do not establish a right to a refund of taxes that a taxpayer has already remitted to Treasury prior to the effective date.

The change is effective May 8, 2023. [House Bill 4054, 2023; Senate Bill 97, 2023 – Amending section MCL 205.54t.]. Treasury will issue a revised Revenue Administrative Bulletin to replace the current 2000-4 bulletin.

Although this is the current equipment listed under the expanded exemption criteria, additional pieces of equipment may be added in a future amendment. Our dedicated construction accounting specialists will continue to look out for any updates to this revenue administrative bulletin and provide updates when possible. If you are unsure if your business equipment would be eligible for the credit, contact a member of our construction practice.

 

05/17/23

Have A Question?

Fill out this form to speak with our experienced construction team

Hide Firm Disclaimer

©2024 UHY LLP. ALL RIGHTS RESERVED.

UHY LLP is a licensed independent CPA firm that performs attest services in an alternative practice structure with UHY Advisors, Inc., and its subsidiary entities. UHY Advisors, Inc.’s subsidiaries, including UHY Consulting, Inc., provide tax and business consulting services through wholly owned subsidiary entities that operate under the name of “UHY Advisors” and “UHY Consulting”. UHY Advisors, Inc., and its subsidiary entities are not licensed CPA firms. UHY LLP, UHY Advisors, Inc. and UHY Consulting are U.S. members of Urbach Hacker Young International Limited, a UK company, and form part of the international UHY network of legally independent accounting and consulting firms. “UHY” is the brand name for the UHY international network. Any services described herein are provided by UHY LLP, UHY Advisors and/or UHY Consulting (as the case may be) and not by UHY or any other member firm of UHY. Neither UHY nor any member of UHY has any liability for services provided by other members.

On this website, (i) the term "our firm", "we" and terms of similar import, denote the alternative practice structure conducted by UHY LLP and UHY Advisors, Inc. and its subsidiary entities, and (ii) the term "UHYI" denotes the UHY international network, in each case as more fully described in the preceding paragraph.