Michigan’s Rolling Stock Exemption
- Jan 12, 2016 | Gail Cole
Rolling stock is exempt from sales and use tax in Michigan, provided three requirements are met:
- The rolling stock meets the definition of “rolling stock” (see below).
- The rolling stock is purchased, rented or leased by an interstate motor carrier.
- "Interstate motor carrier" is a person engaged in the business of carrying persons or property (not themselves or their own property) for hire across state lines. At least 10% of the fleet mileage must be driven outside of Michigan.
- The rolling stock is “used in interstate commerce.”
- "Used in interstate commerce" means the rolling stock either physically crosses state lines or carriers persons or properties that originated from, or are destined for, locations outside of Michigan.
"Rolling stock" is defined as follows:
- A qualified truck: A commercial motor vehicle power unit with either
- 2 axles and a gross vehicle weight rating in excess of 10,000 pounds, or
- 3 or more axles regardless of the gross vehicle weight rating.
- A trailer designed to be drawn behind a qualified truck.
- Parts or other tangible personal property affixed to or to be affixed to and directly used in the operation of either a qualified truck or trailer. This includes parts and other property purchased and affixed to a truck or trailer after purchase.
Additional information and examples are available on the Michigan Department of Treasury Revenue Administrative Bulletin 2016-2.
Automating sales and use tax compliance simplifies management of sales and use tax exemptions.