Internal Policy Directive 2004-4

Internal Policy Directive 2004-4
November 22, 2004
GENERAL SALES AND USE TAX ACTS: PERMISSIBLE FORMATS FOR MODEL 1, 2 & 3 SELLERS' RETURNS

POLICY ISSUE

What format(s) may a Model 1, Model 2, or Model 3 seller (as defined in the Streamlined Sales and Use Tax Administration Act, MCL 205.821) use in submitting its sales and use tax returns?

POLICY DETERMINATION

A Model 1, 2 or 3 seller (as defined in the Streamlined Sales and Use Tax Administration Act, MCL 205.821) may elect to submit its sales tax and use tax returns in formats designed for that purpose by the Department, or may elect to utilize the format designed for that purpose under the Agreement (as defined in the Streamlined Sales and Use Tax Administration Act, MCL 205.803(a)).

DISCUSSION

Michigan has participated in the Streamlined Sales and Use Tax Project and, with passage of the Streamlined Sales and Use Tax Administration Act (2004 PA 174, MCL 205.801 et seq), anticipates becoming a "member state" under the Streamlined Sales and Use Tax Agreement ("Agreement").

Section 318(C) of the Agreement requires that each member state allow any Model 1, Model 2, or Model 3 seller to submit its sales and use tax returns in a simplified format that does not include more data fields than permitted by the governing board. Section 6 of the General Sales Tax Act, MCL 205.56, and Section 6 of the Use Tax Act, MCL 205.96, provide that a taxpayer shall file a return with the Department in a form provided by the Department. It is the intent of the Department to adopt the uniform return format once it is approved by the governing board under the Agreement.