- Michigan has updated its Sales and Use Tax guidance for lease transactions
- Lessors can choose to pay use tax on total rental receipts instead of purchase costs
- Delivery and installation charges can be excluded from the taxable base if separately stated in the lease agreement or invoice
- Sales or leases of school buses and related services and equipment are tax-exempt when primarily used under a contract with a public school or academy
- Providing an operator with a school bus does not disqualify the transaction from being considered a lease for tax exemption purposes
- To make a lessor election, complete form 3372, Michigan Sales and Use Tax Certificate of Exemption, and select For Lease as the exemption basis
- Form 3372 does not need to be submitted to the Treasury unless requested but must be provided to the seller for record-keeping
- A lessor can provide the required information in a different format as per RAB 2024-11
- Losing the lessor election occurs if the property is used for purposes other than leasing, including personal use, resulting in tax due on the original purchase price at the time of conversion to taxable use
Source: thompsontax.com
Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.
