Instructions For Form 5081 - Sales, Use And Withholding Taxes Annual Return

2017 Form 5081, Page 3

instructions for 2017 Sales, Use and

Withholding Taxes Annual Return (Form 5081)

IMPORTANT: This is a return for Sales Tax, Use Tax, and/

property is transferred to the purchaser. Property transported

or Withholding Tax. If the taxpayer inserts a zero on (or

out of state by the purchaser does not qualify under interstate

leaves blank) any line for reporting Sales Tax, Use Tax, or

commerce. You must keep documentation of out-of-state

Withholding Tax, the taxpayer is certifying that no tax is

shipments to support this deduction.

owed for that tax type. Only enter figures for taxes that you

Line 5e: Nontaxable services billed separately. Enter

are registered and/or liable for. If it is determined that tax is

charges for nontaxable services billed separately, such as

owed, the taxpayer will be liable for the deficiency as well as

repair or maintenance, if these charges were included in

penalty and interest.

gross receipts on line 1.

Line 5f: Bad Debts. The amount of bad debts from your

PART 1: SAleS And USe TAx SecTion

proceeds may be deducted if all of the following criteria are

met:

Line 1A: Total gross sales for tax year being reported.

Enter total sales, including cash, credit and installment

• T he debts are charged off as uncollectible on your books

transactions, of tangible personal property. Include any costs

and records at the time the debts become worthless

incurred before ownership of the property is transferred to

• T he debts are deducted on the return for the period during

the purchaser, including shipping, handling, and delivery

which the bad debts are written off as uncollectible.

charges.

• T he debts are eligible to be deducted for federal income

Line 1B: Out-of-state retailers who do not have retail

tax purposes.

stores in Michigan: Enter total sales of tangible personal

A bad debt deduction may also be claimed by a third-party

property including cash, credit, and installment transactions.

lender provided the retailer who reported the tax and the

Line

2B:

Rental

tangible

property

and

lender financing the sale executed and maintained a separate

accommodations.

written election designating which party may claim the

• L essors of tangible personal property: Enter amount of

deduction. Certain additional conditions must be met. See

total rental receipts.

MCL 205.54i and MCL 205.99a.

• P ersons providing accommodations: This includes but is

Line 5g: Food for Human/Home Consumption. Enter the

not limited to total hotel, motel, and vacation home

total of retail sales of grocery-type food, excluding tobacco

rentals, and assessments imposed under the Convention

and alcoholic beverages. Prepared food is subject to tax. See

and Tourism Act, the Convention Facility Development

MCL 205.54g and MCL 205.94d for more information.

Act, the Regional Tourism Marketing Act, and the

Line 5h: Government Exemption. Direct sales to the

Community Convention or Tourism Marketing Act.

United States Government, State of Michigan, or its political

Line 3B: Telecommunication Services. Gross income from

subdivisions are exempt.

telecommunications service.

Line 5i: Michigan Motor Fuel Tax. Motor fuel retailers

Line

5a-5l:

Allowable

Deductions.

Use

lines

may deduct the Michigan motor fuel taxes that were included

5a - 5l to deduct from gross sales the nontaxable sales

in gross sales on line 1 and paid to the State or the distributor.

included in line 4. Deductions taken for tax exempt

Line 5j: Direct Payment Deduction. Sales to companies

sales must be substantiated in your records. You

that claim direct payment of sales or use tax to the State of

must obtain from the purchaser a completed copy of

Michigan. Such companies must have a sales tax license

Michigan Sales and Use Tax Certificate of Exemption

or use tax registration, and have a letter from Treasury

(Form 3372) or the same information in another format. For

specifically

granting

direct

payment

authority.

For

more information on exemption documentation, see Revenue

qualifications, see RAB 2000-3.

Administrative Bulletin (RAB) 2016-14.

Line 5k: Other Exemptions or Deductions. Identify

Line 5a: Resale, sublease or subrent. Enter resale, sublease

deductions not covered in items 5a through 5j on this line. Do

or subrent exemption claims.

not include taxes paid to Secretary of State. Examples of

Line 5b: Industrial Processing Exemption. The property

deductions are:

sold must be for direct use in producing a product for

• D irect sales, not for resale, to certain nonprofit agencies,

eventual sale at retail.

churches, schools, hospitals, and homes for the care of

Line 5c: Agricultural Production Exemption. The

children and the aged, provided such activities are

property sold must be for direct use in agricultural

nonprofit and payment is directly from the funds of the

production.

exempt organization.

Line 5d: Interstate Commerce. Enter sales made in

• A ssessments imposed under the Convention and Tourism

interstate commerce. To claim such a deduction, the property

Act, the Convention Facility Development Act, the

must be delivered out-of-state before ownership of the

Instructions For Form 5081 - Sales, Use And Withholding Taxes Annual Return - 2017

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