On April 26, Gov. Gretchen Witmer signed two bills passed by the Michigan legislature in March 2023 that exempt charges for delivery and installation of tangible personal property. The new laws are effective immediately as of the governor’s date of signing.
H.B. 4039 and H.B. 4253 amend the Michigan sales and use tax law to create exemptions for delivery charges and installation services of tangible personal property, as long as the charges are separately stated on the sales invoice. According to Michigan statutes MCL § 205.51a(e) and MCL § 205.92b(e), “[d]elivery charges include, but are not limited to, transportation, shipping, postage, handling, crating, and packing.”
The bills also call for the cancellation of all assessments and notices of intent to assess any businesses who failed to collect and remit sales and use tax on delivery and installation charges, giving the Michigan Department of Treasury 90 days to complete the cancellations. Additionally, the Department is barred from issuing assessments on these types of charges for any periods occurring prior to when the bill was signed.
Reach out to your trusted sales and use tax advisors to ensure you and your tax tracking or accounting software are up to date with these new exemptions, and to inquire about obtaining confirmation that any pending assessments from the state of Michigan for delivery and installation charges are cancelled.