Michigan Sales, Use, And Withholding Tax Forms And Instructions (Page 11 of 16) in pdf

Line 5f, Food for Human/Home Consumption: Enter total

LINE-BY-LINE INSTRUCTIONS – MONTHLY AND

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

QUARTERLY WORKSHEETS

alcoholic beverages. Prepared food is subject to tax.

Begin on line 15 if ﬁ ling withholding only.

Columns not

Line 5g, Bad Debts: You may deduct the amount of bad debts

referenced on speciﬁ c lines indicate they are not applicable.

from your proceeds if the debts are charged off as uncollectible

See instructions on page 7 if you ﬁ le annually.

on your books and records at the time the debts become

Line 1, Gross Sales: Any costs incurred before the property

worthless and you have deducted the debts on your return

is transferred to the buyer (including shipping, handling, and

for a period during which the bad debts are written off as

delivery charges) are not considered services and are subject to

uncollectible. The debt must also be eligible to be deducted for

tax.

federal income tax purposes. Effective October 1, 2009, a bad

debt deduction may be claimed by a third-party lender provided

Column A, Use Tax on Sales and Rentals: This line is for

the retailer who reported the tax and the lender ﬁ nancing the

out-of-state retailers who do not have retail stores in Michigan.

sale executed and maintained a written election designating

Enter total sales of tangible personal property including cash,

which party may claim the deduction. Certain additional

credit, and installment transactions.

conditions must be met. See MCL 205.54i and MCL 205.99a.

Column B, Sales Tax: Enter total of all sales of tangible

Line

5h,

Michigan

Motor

Fuel

Diesel

Fuel

personal property including cash, credit, and installment

Tax, Column B: Motor fuel retailers may deduct the Michigan

transactions.

motor fuel taxes that were included in gross sales on line 1 and

Line 2, Rentals, Column A: Lessors of tangible personal

paid to the State or the distributor.

property who pay use tax on rental receipts must enter rental

Line 5i, Other Deductions: Identify deductions not covered in

income. Also enter total hotel and motel room rentals including

items 5a through 5h on this line. Examples of deductions are:

assessments imposed under the Convention and Tourism Act,

the Convention Facility Development Act, the Regional Tourism

• Assessments imposed under the Convention and Tourism

Marketing Act, or the Community Convention or Tourism

Act, the Convention Facility Development Act, the Regional

Marketing Act. See Line 5i for instructions on deducting the

Tourism Marketing Act, or the Community Convention or

assessments from rentals.

Tourism Marketing Act. Hotels and motels may deduct the

assessments included in gross sales and rentals provided use

Line 3, Telecommunications Services, Column A: Enter

tax on the assessments was not charged to the customers.

gross income from telecommunications services.

• Credits allowed to customers for sales tax originally paid on

Allowable Deductions: Use lines 5a - 5j to deduct nontaxable

merchandise voluntary return; provided the return is made

sales you made from gross sales. Deductions taken for tax

within the time period for returns stated in the taxpayer’s

exempt sales must be substantiated in your records. For lines 5a

refund policy or 180 days after the initial sale, whichever is

and 5b, as well as items 3 through 5 under line 5i instructions,

earlier. Repossessions are not allowable deductions.

you must obtain a completed copy of Form 3372, or the same

• Direct sales to the United States Government, State of

information in another format, from the purchaser.

Michigan, or its political subdivisions. Direct sales not

Line 5a, Resale: Enter sales which will be resold to others.

for resale to certain nonproﬁ t agencies, churches, schools,

hospitals, and homes for the care of children and the aged,

Line 5b, Industrial Processing/Agricultural Producing:

provided such activities are nonproﬁ t and payment is directly

Enter sales of tangible personal property and services to

from the funds of the exempt organization.

purchasers claiming an exemption as industrial processors or

• Sales to contractors of materials which will become part of

agricultural producers. The property sold must be for direct use

a ﬁ nished structure for a qualiﬁ ed exempt nonproﬁ t hospital,

in producing a product for eventual sale.

qualiﬁ ed exempt nonproﬁ t housing entity or church sanctuary.

Line 5c, Interstate Commerce: Enter sales made in interstate

The purchaser will provide a Michigan Sales and Use Tax

commerce. To claim such a deduction, the property or service

Contractor Eligibility Statement (Form 3520). See RAB 1999-2.

must be delivered by you to the out-of-state purchaser. Property

• Sales to companies that claim direct payment of use tax to

transported out of state by the purchaser does not qualify

the State of Michigan. Such companies must have a sales

under interstate commerce. You must keep documentation of

tax license or use tax registration, and have a letter from

shipment out-of-state to support this deduction.

Treasury speciﬁ cally granting direct payment authority.

Line 5d, Exempt Services: Enter charges for nontaxable

• Qualiﬁ ed nonproﬁ t organizations may take a deduction of

services billed separately, such as repair or maintenance, if

their sales if total sales are less than $5,000 and they did

these charges were included in gross receipts on line 1. Any

not collect sales tax from their customers. If total sales are

costs incurred before the property is transferred to the buyer

$5,000 or more, the entire amount of sales is subject to tax.

(including shipping, handling, and delivery charges) are not

For qualiﬁ cations, see RAB 1995-3.

considered services and are subject to tax.

Line 5j. Tax included in gross sales.

Line 5e, Tax Paid to the Secretary of State, Column B: Enter

Column A: Does not apply.

sales by licensed vehicle dealers (not including tax) of vehicles

and mobile homes on which you paid sales tax to the Secretary

Column B: Complete this line only if you have tax included in

of State.

Michigan Sales, Use, And Withholding Tax Forms And Instructions Page 11

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