Sales tax: exemptions; offset of the trade in value of personal electronics; provide for. Amends sec. 1 of 1933 PA 167 (MCL 205.51).
SB 981 amends Michigan’s General Sales Tax Act to add a new sales-tax exclusion for trade-in credits involving portable electronic devices. Under the bill, when a customer trades in a portable electronic device as part payment for a new or used portable electronic device purchased from a retailer that sells such devices, the agreed-upon trade-in value may be credited against the sales price if it is separately stated on the invoice or similar document. The bill defines “portable electronic device” broadly to include portable electronic devices and related accessories.
The bill also carries forward existing statutory language on what counts as “sales price” for sales tax purposes, including delivery and installation charges, and it preserves the special rule that the Department of Treasury must not assess sales tax on certain delivery and installation charges for periods before April 26, 2023. Those retroactive assessment provisions do not apply to utility-related electricity, natural gas, or artificial gas charges. Overall, the bill is a targeted amendment to the sales tax base rather than a broad tax-rate change.
The bill would amend section 1 of the General Sales Tax Act (1933 PA 167, MCL 205.51) by adding portable electronic device trade-in credits to the list of items excluded from “sales price” for sales tax purposes. This would reduce the taxable amount on qualifying retail sales of phones, tablets, and similar devices when a trade-in is used as part of the purchase price, provided the credit is separately itemized. It would affect retailers of consumer electronics and purchasers using trade-ins, and it would align portable-device treatment more closely with existing trade-in rules for motor vehicles, recreational vehicles, and watercraft.
The available context suggests generally favorable or at least noncontroversial treatment of the bill, but there are no committee transcripts or recorded votes to show active debate. The caption indicates the bill’s purpose is to provide an offset for the trade-in value of personal electronics, which implies a consumer-tax relief measure rather than a revenue-raising or punitive change. Because no formal discussion or vote history is provided, there is no evidence of organized opposition in the available record.
The main policy issue is the scope of the new sales-tax exclusion: whether portable electronic devices should receive the same trade-in treatment already available for certain vehicles and watercraft, and how broadly “portable electronic device” should be interpreted to include accessories. A secondary issue is administrative simplicity, since the exemption depends on separate itemization and documentation. The retroactive cancellation of assessments for delivery and installation charges is another potentially sensitive point, but the bill text expressly limits that rule and excludes utility-related charges.