MICHIGAN DEPARTMENT OF TREASURY
SALES AND USE TAXES
R 205.74 Educational institutions. Rule 24.
(1) Sales, not for resale, to regularly organized educational institutions not operated for profit are EXEMPT [FROM TAXATION?]. not taxable.
(2) AS USED IN THIS RULE:
(A) "Not operated for profit," as used in this rule, means operated by
an entity of government, a regularly organized church, religious or fraternal
organization, where the income from the operation does not inure, in whole or in
part, to the benefit of individuals or private shareholders, directly or
indirectly, and where the activities of the entity are carried on exclusively
for the benefit of the public at large and are not limited to the advantage,
interests, or benefits of its members or a restricted group.
(B) "Educational institution," as used in this rule, means an
institution of learning, organized solely for educational purposes, which
maintains a faculty of qualified instructors, and teaches regular, continuous
courses of study, and which confers upon students a recognized diploma after
completion of a specific curriculum. EDUCATIONAL INSTITUTION INCLUDES A PARENT
COOPERATIVE PRESCHOOL.
(C) "PARENT COOPERATIVE PRESCHOOL" IS A NONPROFIT, NONDISCRIMINATORY
EDUCATIONAL INSTITUTION, MAINTAINED AS A COMMUNITY SERVICE AND ADMINISTERED BY
PARENTS OF CHILDREN CURRENTLY ENROLLED IN THE PRESCHOOL. THE PRESCHOOL MUST
PROVIDE AN EDUCATIONAL AND DEVELOPMENTAL PROGRAM FOR CHILDREN YOUNGER THAN
COMPULSORY SCHOOL AGE AND ALSO PROVIDE AN EDUCATIONAL PROGRAM FOR PARENTS,
INCLUDING ACTIVE PARTICIPATION WITH CHILDREN IN PRESCHOOL ACTIVITIES. IT MUST
ALSO BE DIRECTED BY QUALIFIED PRESCHOOL PERSONNEL AND LICENSED BY THE DEPARTMENT
OF CONSUMER AND INDUSTRY SERVICES.
(3) (2) Sales of TANGIBLE PERSONAL PROPERTY SUCH AS athletic equipment to a regularly organized educational institution for consumption or use are not taxable IF ALL OF THE FOLLOWING CONDITIONS ARE MET:
WHEN if the athletic activities IN WHICH THE PROPERTY IS USED are under the management and control of the educational institution, and the entire receipts are expended for athletic or educational purposes.
THE INSTITUTION IS SHOWN AS THE PURCHASER.
PAYMENT IS MADE FROM FUNDS OF THE INSTITUTION.
THE ENTIRE RECEIPTS FROM SPONSORED ATHLETIC ACTIVITIES ARE EXPENDED BY THE EDUCATIONAL INSTITUTION FOR ATHLETIC OR EDUCATIONAL PURPOSES.
(4) A CHARGE TO STUDENTS TO PARTICIPATE IN SCHOOL ACTIVITIES, SUCH AS AN ATHLETIC FUNCTION, IS NOT A SALE AT RETAIL. HOWEVER, A CHARGE TO STUDENTS BEYOND A PARTICIPATION FEE, THAT INVOLVES A TRANSFER OF OWNERSHIP OF TANGIBLE PERSONAL PROPERTY, IS A RETAIL SALE SUBJECT TO TAX.
(5) (3) SALES BY Educational EDUCATIONAL institutions which are not operated for profit, and which operate THROUGH lunchrooms, cafeterias, or dining rooms OPERATED for the exclusive use of bona fide enrolled students are not taxable. Whenever such a lunchroom, school cafeteria, or dining room sells to nonstudents, including teachers, the institution operating it is subject to the tax on those sales.
(6) (4) Sales of class pins, rings, and similar articles are taxable when paid for, directly or indirectly, by the students.
(7) (5) Sales to educational associations, parent teacher organizations, teachers, and other personnel of an educational institution are taxable.
(8) (6) If an exemption is claimed, then at the time of the transfer of the tangible personal property, the seller shall retain, as part of the seller's records, an executed exemption certificate AS PRESCRIBED BY THE DEPARTMENT. which reads as follows: CERTIFICATE TO BE EXECUTED WHEN TAX EXEMPT SALE IS MADE TO AN EXEMPT INSTITUTION OR AGENCY The undersigned hereby certifies that the item or items being purchased are to be used or consumed in connection with the operation of the exempt institution or agency named in the space provided below and that the consideration for this purchase moves from the funds of the designated institution or agency. In the event this claim is disallowed the transferee promises to reimburse the seller for the amount of tax involved.
FERRIS STATE UNIVERSITY
Name of exempt institution or agency
Date ___Lisa Besemer Interim Director of Purchasing
Signature and title of person making certification
Date last Modified: June 2, 2006