Metro Detroit Real Estate Voice

Are you on this list? See if you are next to be hit by the 2% tax on "services".

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Services that are Exempt

Health Care

1. • Services of physicians

 

2. • Services of dentists

 

3. • Services of other health practitioners including chiropractors; optometrists; mental health practitioners; physical, occupational and speech therapists and audiologists; and podiatrists

 

4. • Outpatient care centers including family planning centers

 

5. • Outpatient mental health and substance abuse centers

 

6. • Other outpatient centers including HMO medical centers, kidney dialysis centers, and surgical and emergency centers

 

7. • Medical and diagnostic laboratories

 

8. • Home health care services

 

9. • Ambulance services

 

10. • Other ambulatory health care including blood and organ banks

 

11. • Hospitals including medical and surgical hospitals; psychiatric and substance abuse hospitals; and specialty hospitals

 

12. • Nursing care facilities

 

13. • Residential mental retardation, mental health, and substance abuse facilities

 

14. • Community care facilities for the elderly including homes for the elderly and other residential care facilities

 

Social Assistance

1. • Individual and family services including child and youth services, and services for the elderly and persons with disabilities

 

2. • Community food services

 

3. • Community housing services including temporary shelters, transitional housing to low-income individuals and families, volunteer construction or repair of low-cost housing, and repair of homes for the elderly or disabled

 

4. • Emergency and other relief services

 

5. • Vocational rehabilitation services including job counseling, job training, and training and employment to persons with disabilities

 

6. • Child day care services

 

Other Exempt Services

1. • Educational services, including personal lessons

 

2. • Services performed or provided by a nonprofit school or nonprofit educational institution to students grade 12 or below

 

3. • Services performed or provided by a church, hospital, parent cooperative preschool, or nonprofit organization (exempt under sections 501(c)(3) or 501(c)(4) of the Internal Revenue Code), up to a total amount of $5,000 in a calendar year

 

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1. • Wired telecommunications services

 

2. • Wireless telecommunications services

 

3. • Accommodations and rental housing

 

4. • Water and sewer systems

 

5. • Air transportation

 

6. • Water transportation of freight and passengers, except scenic transportation

 

7. • Pipeline transportation

 

8. • Publishing and broadcasting, except cable television and satellite television subscriptions, an exemption that would include the purchase of advertising media such as television or radio time, print or billboards.

 

9. • Motion pictures, except for admissions to motion picture or video exhibitions

 

10. • Sound recording

 

11. • Internet service providers, Web search portals, data processing services, and other information services – Includes access to the Internet; Internet search facilities; transforming, preparing, or placing data for dissemination on the Internet for others. Also includes the use of shared computer resources, news syndicates, libraries, and archives.

 

12. • Services provided as part of a live entertainment event such as the services provided by promoters; agents and managers; and independent artists, writers, and performers

 

13. • Admissions to museums, historical sites, parks, and zoos

 

14. • Gambling industry services

 

15. • Leasing real property, including residential buildings and dwellings, non-residential buildings, and other real property

 

16. • Rail and truck transport

 

17. • Religious, grant making, and civic services, including religious organizations; grant making foundations and charitable trusts; social advocacy organizations; civic and social organizations; and business, professional, labor, and political organizations

 

18. • Computer systems design includes writing, modifying, testing, and supporting software to meet the needs of a particular customer; planning and designing computer systems that integrate computer hardware, software, and communication technologies; and on-site management and operation of clients' computer systems and/or data processing facilities

 

19. • Scientific research and development including conducting original investigation undertaken on a systematic basis to gain new knowledge (research) and/or the application of research findings or other scientific knowledge for the creation of new or significantly improved products or processes (experimental development). This includes research in the physical, engineering, life, and social sciences and the humanities.

 

20. • Finance and insurance services including most activities of banks and credit unions; most activities of nonbank credit institutions (mortgage lenders and credit card companies); securities and commodity brokerage and management; and activities of pension funds, health and welfare funds, insurance funds, and investment pools. The following finance and insurance services are not exempt and would be subject to tax: i) insurance agency and brokerage services; ii) claims adjusting services; iii) third-party insurance administration services; and iv) investment advice.

 

Purchasers for whom the Provision of a Service is NOT Taxed

1. • Farmers as part of the farming operation

 

2. • Manufacturers for direct use in manufacturing

 

3. • Governmental entities including the American Red Cross

 

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1. • Intermediaries who purchase a service for a third party and the third party is the ultimate consumer of the service (resale of the same service)

 

2. • Regularly organized church or house of worship, excluding a service consumed as part of a commercial enterprise

 

3. • Extractors for direct use in an extractive operation

 

4. • Nonprofit school, nonprofit hospital, nonprofit home for children or aged persons operated by a governmental entity, religious, or fraternal organization, veterans’ organization, or corporation, if the operation benefits the public at large

 

5. • Nonprofit organizations exempt under sections 501(c)(3) and 501(c)(4) of the Internal Revenue Code, to the extent the service allows the organization to carry out its purpose

 

Transactions Currently Taxed under the 6% Use Tax and not Subject to the 2 Percent Tax

1. • Typesetting; plate making

 

2. • Intrastate telephone and telegraph (business and residential)

 

3. • Interstate telephone and telegraph, based on origin and billing address (business and residential)

 

4. • Cellular phone (business and individual)

 

5. • Natural gas for business use

 

6. • Other fuel (including heating oil) for business use

 

7. • Electricity

 

8. • Natural gas for residential use (4 % rate )

 

9. • Other fuel, including heating oil for residential use (4% rate)

 

10. • Tuxedo rental

 

11. • Water softening

 

12. • Commercial art and graphic design

 

13. • Commercial linen supply

 

14. • Photocopying

 

15. • Photo finishing

 

16. • Printing

 

17. • Sign construction and installation

 

18. • Software- packaged or canned program

 

19. • Material for custom software programs

 

20. • Video rental

 

21. • Short term property rental (such as carpet cleaners or lawn equipment)

 

22. • Rental of bulldozers and other heavy equipment

 

23. • Short term auto rental

 

24. • Long term auto leasing

 

25. • Aircraft rental to individual pilots both short and long term.

 

26. • Hotel and motel for less than 30 consecutive days

 

27. • Repair material

 

28. • Taxidermy

 

Published Tuesday, February 13, 2007 6:27 PM by Al Block