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Are You an Interstate Motor Carrier That Has Paid Sales Tax on After-Market Equipment Purchases?

If so now is the time to file a Refund Claim…

On January 8, 2016, the State of Michigan issued a Revenue Administrative Bulletin “RAB” that all Michigan Interstate trucking companies should be aware of.  This ruling affects purchases of equipment “affixed” to a qualified truck or trailer AFTER its original purchase. This ruling interpretation affects all purchases going forward AND retroactively to Dec 27, 2012 when the expanded original statute was enacted. Examples of items that are exempt include “global positioning systems (GPS), in-cab heaters, alternative power units, straps, chains and refrigerator units.”

Previously, vendors such as Omnitracs were not recognizing these purchases as tax exempt even though Michigan Sales Tax “Certificates of Exemption” were being presented at the time of purchase.  Certain vendors contended that the December 2012 statute did not address after-market equipment any different from the existing exemptions at that time.

This RAB now clarifies the original intent of both the sales and use tax interstate motor carrier exemptions. The RAB explains that the expanded exemption was meant to also include “parts or other property that are purchased and affixed to a truck or trailer after the original purchase. Parts or other property do not need to replace an item that was a component part of the truck or trailer when it was sold or purchased to qualify as rolling stock. Items that may be exempt include, but are not limited to, global positioning systems (GPS), in-cab heaters, alternative power units, straps, chains and refrigerator units”.

Trucking companies that paid sales and use taxes in 2013 through 2015 on after-market equipment purchases or leases can now request refund claims from the respective vendors. Vendors will process the refund claims subject to the Michigan statute-of-limitations which is four years.  We are currently assisting clients with these claims which in one case has resulted in thousands of dollars in refunds.

Following is the link to RAB 2016-2 (Approved: January 8, 2016)

http://www.michigan.gov/documents/treasury/RAB2016-2_510501_7.pdf

 

Contact Greg Zink, our Transportation Team Leader for assistance with processing Sales or Use Tax Refund Claims or to find out if you qualify for the Michigan Sales and Use Tax Interstate Motor Carrier Exemption and visit our Transportation and Logistics Industry page to learn about the services we offer.

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