Reinstatement Fees Taxable In Michigan

Fees paid by customers to reinstate rental purchase agreements after a contract default are subject to Michigan use tax. The fees were not considered to be paid as a separate service, but rather part of the total price paid for the use and consumption of goods. The main purpose of the transaction was the rental and sale of goods and, therefore, taxable. (Continental Rental, Inc. v. Michigan Department of Treasury, Michigan Tax Tribunal, No. 297569)

Posted on October 18, 2006