2015 Senate Bill 616 / Public Act 251

Exempt developers of “Pyramid” building from sales tax

Introduced in the Senate

Nov. 10, 2015

Introduced by Sen. Tonya Schuitmaker (R-26)

To exempt from sales tax the purchase of specified business equipment by the developers of a proposed “data center” to be located in the former Steelcase “Pyramid” building in Grand Rapids, including computers, servers, construction materials, infrastructure, machinery, wiring, cabling, devices, tools, vehicles, technology, software, hardware and more. <br>Related bills (Senate bill 618 and 5076) would exempt the owners of this operation from having to pay use tax and property tax on business tools and equipment.

Referred to the Committee on Michigan Competitiveness

Dec. 3, 2015

Reported without amendment

With the recommendation that the substitute (S-1) be adopted and that the bill then pass.

Amendment offered

To only exempt eligible firms from two-thirds of the sales tax.

The amendment passed by voice vote

Amendment offered by Sen. David Knezek (D-5)

To require the legislature to appropriate money to public schools from other revenue to compensate for the amount the proposed tax breaks reduce revenue that currently flow into the state school aid fund.

The amendment passed by voice vote

Passed in the Senate 21 to 15 (details)

To partially exempt business equipment purchases made by an internet data center from the state sales tax. The bill originally applied only to the developers of proposed data center in the vacant “Pyramid” building near Grand Rapids, but was expanded to all companies in this particular business. For the next 15 years these firms would only have to pay 2 percent sales tax on most equipment and construction materials, rather than 6 percent like others.

Received in the House

Dec. 3, 2015

Referred to the Committee on Tax Policy

Dec. 9, 2015

Reported without amendment

With the recommendation that the substitute (H-1) be adopted and that the bill then pass.

Dec. 15, 2015

Substitute offered by Rep. Ken Yonker (R-72)

To exempt these firms from the full 6 percent sales tax, not just two-thirds of it, and add some additional conditions on the tax breaks.

The substitute passed by voice vote

Amendment offered by Rep. Jim Townsend (D-26)

To end the tax breaks if the companies do not create a specified number of jobs by specific dates.

The amendment passed by voice vote

Amendment offered by Rep. Michael Webber (R-45)

To clarify details of sales and use tax levied on "cloud" computing software and services.

The amendment failed by voice vote

Passed in the House 61 to 45 (details)

To exempt business equipment purchases made by an internet data center from the state sales tax. The bill originally applied only to the developers of proposed data center in the vacant “Pyramid” building near Grand Rapids, but was expanded to all companies in this particular business. The House did not adopt the proposal in Senate Bill 618 to also exempt these firms from property taxes levied on business tools and equipment (the so-called "personal property tax").

Received in the Senate

Dec. 15, 2015

Passed in the Senate 26 to 12 (details)

To concur with the House-passed version of the bill, which exempts these firms from the full 6 percent sales tax, not just two-thirds of it.

Signed by Gov. Rick Snyder

Dec. 23, 2015