SB 983

SENATE BILL NO. 983
A bill to permit local units of government to impose and
collect an excise tax on persons engaged in the business of providing
accommodations to transient guests; to provide for the disposition of the
proceeds of the excise tax; to provide for the collection, enforcement, and
administration of the excise tax by this state; to provide for the creation and
administration of certain funds and the distribution of money from those funds;
to provide for the powers and duties of certain state and local governmental
officers and entities; to allow the promulgation of rules; and to prescribe
penalties.
the people of the state of michigan enact:
Sec. 1. This act may be
cited as the "local excise tax on accommodations act".
Sec. 3. As used in this
act:
(a) "Accommodation" means a room or other space
provided for dwelling, lodging, or sleeping purposes, including furnishings and
other accessories in the room or other space. Accommodation does not include
food and beverages.
(b) "Accommodation provider" means a person that
owns, operates, controls, or otherwise has the right to offer an accommodation
for rent and that offers the accommodation for rent to transient guests.
(c) "Accommodations intermediary" means a person
that facilitates the rental of an accommodation on behalf of an accommodation
provider by listing or advertising the accommodation for rent in a marketplace
and, either directly or indirectly through agreements or arrangements with
third parties or its affiliates, collecting payment from the transient guest
and transmitting that payment to the accommodation provider.
(d) "Booking transaction" means when an
accommodations intermediary facilitates the rental of an accommodation in a
residential dwelling to a transient guest by an accommodation provider by doing
both of the following:
(i)
Listing or advertising the accommodation for rent by the accommodation provider
to a transient guest in a marketplace.
(ii)
Either directly or indirectly through agreements or arrangements with third
parties or its affiliates, collecting payment from the customer and
transmitting all or a portion of that payment to the accommodations provider.
(e) "Department" means the department of treasury.
(f) "Excise tax" means the excise tax levied by a
local unit of government under this act.
(g) "Fund" means the local accommodations excise tax
trust fund created by section 13.
(h) "Local governing body" means the body in which
the legislative powers of a local unit of government are vested.
(i) "Local unit of government" means a city,
village, or township.
(j) "Marketplace" means any physical or electronic
place, including, but not limited to, a store, booth, website, catalog,
television or radio broadcast, dedicated sales software application, or similar
platform where an accommodation provider rents or offers to rent an
accommodation to transient guests.
(k) "Ordinance" means an ordinance enacted by a
local unit of government under this act to levy an excise tax.
(l)
"Person" means a natural person or a partnership, fiduciary,
association, corporation, or other entity.
(m) "Purchase price" or "price" means that
term as defined in section 2 of the use tax act, MCL 205.92, but does not
include a charge by an accommodations
intermediary for its services to a transient
guest.
(n) "Residential dwelling" means a cabin, house,
trailer, vehicle, or structure, or portion thereof, used, or designed to be
used, as a residence or home of 1 or more individuals.
(o) "Revenues" means the income derived from the
excise tax, plus interest and penalties imposed by this act, levied by an
ordinance adopted pursuant to this act.
(p) "Transient guest" means a natural person who
occupies an accommodation for less than 30 consecutive days.
(q) "Use tax" means the tax levied under the use tax
act.
(r) "Use tax act" means the use tax act, 1937 PA 94,
MCL 205.91 to 205.111.
Sec. 5. (1) Beginning July
1, 2027, and subject to the requirements of this section, the local governing
body of a local unit of government may enact an ordinance to levy an excise tax
on the rental of an accommodation to a transient guest at a rate of not more
than 3% of the purchase price for the accommodation.
(2) The local governing body of a local unit of government
shall not levy an excise tax under this section unless a majority of the
qualified electors of that local unit of government voting on the question
approve the levy of the excise tax in compliance with section 31 of article IX
of the state constitution of 1963.
(3) An ordinance described in subsection (1) may be amended or
repealed in the same manner as it was adopted.
(4) An ordinance described in subsection (1) must comply with
subsection (10) and include all of the following:
(a) The rate of the excise tax to be imposed, which must be
the same for, and applied uniformly to, all types of accommodations.
(b) A provision that, except as otherwise provided in
subdivision (c), an accommodation provider shall collect the excise tax from
the transient guest.
(c) A provision that an accommodations intermediary shall
collect and remit the excise tax on all booking transactions facilitated by the
accommodations intermediary on behalf of an accommodation provider that are
subject to the excise tax.
(d) A provision that the excise tax will be administered by
the department in the same manner as the use tax.
(e) In accordance with subsection (7), a statement that any
conflict between the provisions of the ordinance and this act must be resolved
in favor of this act.
(f) Any applicable exemptions under subsection (11).
(5) Not less than 90 days before an excise tax or a change in
the rate of an excise tax takes effect, the local unit of government shall
provide the department with a copy of the ordinance that imposes or changes the
rate of the excise tax and notify the department of all of the following:
(a) The effective date of the excise tax or the change in the
rate of the excise tax.
(b) The rate of the excise tax.
(c) Any exemption required under subsection (11).
(6) If the department receives the necessary information as
required under subsection (5), the department shall post the information
described in subsection (5)(a), (b), and (c) on its website not less than 45
days before the excise tax or a change in the rate of the excise tax takes
effect.
(7) Any conflict between the provisions of an ordinance
enacted by a local unit of government and this act must be resolved in favor of
this act.
(8) Beginning January 1, 2028, not later than March 15 of each
year, a local unit of government levying an excise tax shall file with the
department a report that includes all of the following information for the
immediately preceding calendar year and, not later than 60 days after the
receipt of that report, the department shall publish the report on its website:
(a) The rate of the excise tax.
(b) The total amount of revenues received by the local unit of
government.
(c) A schedule of all revenues expended by the local unit of
government, and the purposes for which the revenues were expended, including
the amount of the expenditure and the contracted entity, if any, for the
expenditure.
(9) If a local unit of government fails to file the report
required under subsection (8), the department shall not remit revenues
collected by the department under this act to that local unit of government
until the report is filed.
(10) If a village has an accommodation located within a
township that levies an excise tax, then the accommodation is exempt from the
excise tax levied by the village.
(11) If accommodations in a local unit of government are
subject to an assessment under any of the following acts on the effective date
of this act, then the following exemptions apply to an excise tax levied under
this act in that local unit of government:
(a) In a local unit of government with an assessment under the
community convention or tourism marketing act, 1980 PA 395, MCL 141.871 to
141.880, accommodations in a building that contains 10 or more rooms used in
the business of providing dwelling, lodging, or sleeping to transient guests
are exempt.
(b) In a local unit of government with an assessment under the
convention and tourism marketing act, 1980 PA 383, MCL 141.881 to 141.889,
accommodations in a building that contains 35 or more rooms used in the
business of providing dwelling, lodging, or sleeping to transient guests are
exempt.
(c) In a local unit of government with an assessment under the
regional tourism marketing act, 1989 PA 244, MCL 141.891 to 141.900,
accommodations in a building that contains 10 or more rooms used in the
business of providing dwelling, lodging, or sleeping to transient guests are
exempt.
(d) In a local unit of government with an assessment under the
convention and tourism promotion act, 2007 PA 25, MCL 141.1321 to 141.1328,
accommodations in a building that contains 35 or more rooms used in the
business of providing dwelling, lodging, or sleeping to transient guests are
exempt.
(e) In a local unit of government with an assessment under the
regional convention and tourism promotion act, 2010 PA 254, MCL 141.1431 to
141.1437, accommodations in a building that contains 2 or more rooms used in
the business of providing dwelling, lodging, or sleeping to transient guests
are exempt.
(f) In a local unit of government with an assessment under the
regional event center financing act, 2020 PA 340, MCL 141.1441 to 141.1445,
accommodations in a building that contains 35 or more rooms used in the
business of providing dwelling, lodging, or sleeping to transient guests are
exempt.
(12) An exemption under subsection (11)(a), (b), (c), (d),
(e), or (f) applies only while the assessment described in subsection (11)(a),
(b), (c), (d), (e), or (f) remains in effect.
Sec. 7. (1) The department
is vested with all the powers, duties, functions, responsibilities, and
jurisdiction to administer, collect, and enforce any excise tax enacted
pursuant to this act. The department shall not charge to or collect from a
taxpayer any amount not otherwise authorized by law in conjunction with the
collection of tax authorized by this act.
(2) The department shall administer, enforce, and collect the
excise tax in the same manner as the use tax is administered, enforced, and
collected under the use tax act and 1941 PA 122, MCL 205.1 to 205.31, except
that if the use tax act or 1941 PA 122, MCL 205.1 to 205.31, and this act
conflict, this act applies.
(3) The department may promulgate rules to implement this act
pursuant to the administrative procedures act of 1969, 1969 PA 306, MCL 24.201
to 24.328.
(4) Information obtained pursuant to a provision in this act or the applicable ordinance or through any
return, investigation, hearing, or verification required or authorized by this act or the applicable ordinance is
confidential, except for official purposes in connection with the enforcement
of an excise tax authorized by this act or the use tax act or pursuant to a
proper judicial order. A person that divulges or uses this confidential
information, except for official purposes in connection with the enforcement of
an excise tax authorized by this act or the use tax act or pursuant to a proper
judicial order, is guilty of a violation of the ordinance punishable by a fine
of not more than $5,000.00, imprisonment for not more than 5 years, or both.
Additionally, if the offense is committed by an employee of this state or of a
local unit of government, the person must be dismissed from office or
discharged from employment on conviction.
(5) In computing the amount of tax payment required for any
month from a taxpayer that collects and remits an excise tax authorized by this
act from the transient guest under this act, the taxpayer tax may deduct an
amount equivalent to the amount provided by section 4f(1)(a) of the use tax
act, MCL 205.94f.
Sec. 9. (1) Except as
otherwise provided in this section, an accommodations intermediary that has
nexus with this state under subsection (7) shall collect and remit the excise
tax authorized by this act on booking transactions facilitated by the accommodations
intermediary, regardless of whether the accommodations intermediary makes only
booking transactions or makes a combination of booking transactions and direct
transactions.
(2) If an accommodations intermediary is required to remit the
excise tax under subsection (1), the department shall audit only the
accommodations intermediary for booking transactions and shall not audit an
accommodation provider for booking transactions unless the accommodation
provider fails to provide the accommodations intermediary with sufficient
information to the extent that the accommodations intermediary is not liable
under subsection (3).
(3) An accommodations intermediary is relieved of liability
under this section for failure to remit the correct amount of excise tax to the
extent that the accommodations intermediary demonstrates, to the satisfaction
of the department, that the failure was due to incorrect or insufficient
information given to the accommodations intermediary by the accommodation
provider. The relief under this subsection does not apply if the accommodation
provider is an affiliate of the accommodations intermediary.
(4) An accommodations intermediary is relieved of liability
under this section if the accommodations intermediary demonstrates, to the
satisfaction of the department, that the excise tax was paid to the department
by the accommodation provider or that the excise tax was not due because of an
exemption under this act.
(5) A taxpayer is relieved of liability under this act for
failure to remit the correct amount of excise tax to the extent that the
taxpayer collects the rate of tax published by the department under section
5(6).
(6) An accommodation provider is not liable for the excise tax
on booking transactions facilitated by an accommodations intermediary required
to remit tax under subsection (1) unless the accommodation provider fails to
provide the accommodations intermediary with sufficient information to the
extent that the accommodations intermediary is not liable under subsection (3).
(7) If a person is an accommodations intermediary and
facilitates either of the following, the person has nexus with this state for
purposes of this act:
(a) Not less than $100,000.00 in accommodation rentals in this
state in the previous calendar year.
(b) 200 or more separate transactions for rentals of
accommodations in this state in the previous calendar year.
(8) The applicable excise tax due on rental transactions that
are not booking transactions facilitated by an accommodations intermediary required
to remit the excise tax under subsection (1) must be collected and remitted by
the accommodation provider.
(9) As used in this section:
(a) "Affiliate" means an affiliated person as that
term is defined in section 5a of the use tax act, MCL 205.95a.
(b) "Direct transaction" means the rental of
accommodations on one's own behalf or on behalf of an affiliate rather than
facilitated for another person.
(c) "Rental transaction" means any rental of
accommodations, including a direct transaction, a booking transaction, or
another facilitated rental of an accommodation.
Sec. 11. Beginning
January 1, 2028, not later than April 15 of each year, the department shall
publish a report on the department's website that includes all of the following
information for the immediately preceding calendar year for each local unit of government
that levies an excise tax:
(a) Total revenues collected, including all of the following
information:
(i)
The amount of revenues collected on rental transactions of accommodations in
residential dwellings in that local unit of government.
(ii)
The amount of revenues collected on rental transactions of accommodations in
nonresidential dwellings in that local unit of government.
(b) The amount of exempt transactions under section 5(11).
Sec. 13. (1) The local
accommodations excise tax trust fund is created in the state treasury.
(2) Except as otherwise provided in subsection (6), the state
treasurer shall deposit money and other assets received under this act in the
fund. The state treasurer shall direct the investment of money in the fund and
credit interest and earnings to the fund. Money and other assets deposited in
the fund attributable to a specific excise tax levied by a specific local unit
of government must be accounted for separately within the fund and must not be
used to make payments to a local unit of government other than the local unit
of government that levied the excise tax.
(3) Except as otherwise provided in subsection (5), not later
than 30 days after their due date, the department shall remit excise taxes,
interest, penalties, and fees collected by the department to the local unit of
government that levied the excise tax. The local unit of government shall
allocate the money received under this subsection to its general fund.
(4) Except as otherwise provided in subsection (5), if the
department does not provide a remittance to a local unit of government by the
date required under subdivision (3), the department shall pay to the local unit
of government interest on the amount of the delinquent remittance at a rate
equal to the rate of interest accrued on the common cash fund of this state
during the period the remittance is delinquent.
(5) If a local unit of government fails to file the report
required by section 5(8), the department shall not remit excise taxes,
interest, penalties, or fees collected by the department to that local unit of
government until the report is filed.
(6) The department may retain 1% of the excise taxes collected
to cover the cost of collection, enforcement, and administration, and that
portion must be deposited into the state general fund.
(7) The department is the administrator of the fund for audits
of the fund.
(8) The department shall expend money from the fund only for 1
or more of the following purposes:
(a) To remit excise taxes, interest, penalties, and fees
collected by the department to the local unit of government that imposed the
excise tax in accordance with this act.
(b) To pay claims for refund of an excise tax imposed under
this act.
(9) Money in the fund at the close of the fiscal year remains
in the fund and does not lapse to the general fund.
(10) This state may not borrow money from the fund.