Rule 4. (1) Sales of new and used automobiles, buses, trucks, tractors, trailers,
housetrailers, motorcycles, motor scooters, and other vehicles for consumption or use are
subject to the tax on the full retail sales price. The sales price includes the total amount of
consideration, including cash, credit, property, and services, for which the vehicle is sold,
whether received in money or otherwise, and without any deductions for federal taxes,
freight, handling, delivery, commissions, repossessions, advertising, future free service,
or any expense incurred as part of the cost of doing business. The sales tax must be paid
to the secretary of state when the application of title is submitted by the dealer.
(2) In calculating the retail sales price of a motor vehicle subject to tax, if separately
stated on the invoice, bill of sale, or similar document given to the purchaser, the
following may be excluded:
(a) The agreed-upon value of a vehicle used as partial payment to a dealer, subject
to the limitations set forth in R 205.15.
(b) Interest, financing, or carrying charges from credit extended on the sale of the
vehicle.
(c) Taxes legally imposed directly on the consumer.
(3) Unless otherwise exempt, vehicle transfers between individuals are subject to use
tax on the purchase price of the vehicle. In addition, equalization tax as computed under
section 9 of the streamlined sales and use tax revenue equalization act, 2004 PA 175,
MCL 205.179, is imposed to the extent that the retail dollar value at the time of
acquisition exceeds the purchase price of the vehicle. The use tax and equalization tax
due in a vehicle transfer between individuals is payable to the secretary of state when the
application for title is submitted by the purchaser.
(4) When a vehicle is sold by a dealer, the sales price, together with the amount of
sales tax to be paid to the secretary of state, must be indicated on the invoice, sales order,
the statement of this state’s retail sales tax paid as provided by the secretary of state, and
on the records of the dealer. Authorized discounts are deductible only when given to the
purchaser by the dealer at the time of sale and shown on the invoice, sales order, the
statement of sales tax paid as provided by the secretary of state, and on the records of the
dealer. See R 205.22.
(5) The sale of a vehicle for delivery and use outside this state is not subject to tax if
all the following conditions exist:
(a) The dealer delivers and assumes all responsibility for delivery without
knowledge that the vehicle will be returned to this state, except for a temporary use in this
state.
(b) Title to the vehicle passes to the purchaser at a point outside this state.
(c) A vehicle registration for this state is not required.
(d) The dealer’s records substantiate subdivisions (a) to (c) of this subrule.
(6) For a vehicle sold and delivered in this state to a person securing special
registration under section 226 of the Michigan vehicle code, 1949 PA 300, MCL
257.226, to register and use that vehicle in a state that does not impose use tax upon
registration in that state or that does not have a sales tax reciprocity agreement with this
state, no tax is collected upon the sale and delivery of that vehicle in this state.
(7) Unless otherwise exempt, tax is levied on any vehicle sold and delivered in this
state if the purchaser intends to register and use that vehicle in another country or does
not qualify for special registration issued by the secretary of state. (See MCL 257.226.) A
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