Michigan Office of Administrative Hearings and Rules  
Administrative Rules Division (ARD)  
611 W. Ottawa Street  
Lansing, MI 48909  
Phone: 517-335-8658 Fax: 517-335-9512  
REQUEST FOR RULEMAKING (RFR)  
1. Department:  
Treasury  
2. Bureau:  
Bureau of Tax and Economic Policy  
3. Promulgation type:  
Full Process  
4. Title of proposed rule set:  
Specific Sales and Use Tax Rules  
5. Rule numbers or rule set range of numbers:  
R205.127  
6. Estimated time frame:  
6 months  
Name of person filling out RFR:  
David Matelski  
E-mail of person filling out RFR:  
MatelskiD@michigan.gov  
Phone number of person filling out RFR:  
517-335-7424  
Address of person filling out RFR:  
430 W. Allegan, Lansing MI  
7. Describe the general purpose of these rules, including any problems the changes are intended  
to address.  
Michigan is a member of the Streamlined Sales and Use Tax Agreement (SSUTA). Under the  
terms of the SSUTA, if a member state’s sales/use tax acts or rules use a word or phrase that is  
defined in the SSUTA’s Library of Definitions that state must also define that word or phrase using  
the SSUTA definition in its statute or rules in “substantially the same language.” See SSUTA  
Article III, Section 327. Michigan uses the phrase “bottled water” in the General Sales Tax Act  
(GSTA), the Use Tax Act (UTA), and the Specific Sales and Use Tax Rules without providing any  
definition of the phrase in either act or the Specific Sales and Use Tax Rules. See MCL 205.54d  
(d), MCL 205.94(1)(q), and Mich Admin Code R 205.127, respectively. Therefore, Michigan is  
likely out of compliance with the SSUTA on this issue, and absent a correction, Treasury will be  
required to self-report this potential compliance issue when it files its annual Certificate of  
Compliance in August 2020. Michigan can correct this issue by adopting the SSUTA’s definition  
of “bottled water” in its statute or rules. Once properly promulgated, this rule will prevent  
Michigan from being found out of compliance and facing sanctions.  
8. Please cite the specific promulgation authority for the rules (i.e. department director,  
commission, board, etc.).  
MCL 24.239  
RFR-Page 2  
MCL 205.59(2) in the GSTA, “The department [of treasury] shall promulgate rules to implement  
this act pursuant to the administrative procedures act of 1969, 1969 PA 306, MCL 24.201 to  
24.328,” and MCL 205.100(2) in the UTA, “Rules shall be promulgated to implement this act  
under the administrative procedures act of 1969, 1969 PA 306, MCL 24.201 to 24.328.”  
A. Please list all applicable statutory references (MCLs, Executive Orders, etc.).  
MCL 205.59(2), MCL 205.100(2), MCL 205.54d(d), MCL 205.94(1)(q), and Mich Admin Code R  
205.127.  
B. Are the rules mandated by any applicable constitutional or statutory provision? If so, please  
explain.  
Yes, as cited in number 8, MCL 205.59(2) in the GSTA and MCL 205.100(2) in the UTA direct  
that Treasury shall promulgate rules to implement those acts.  
9. Please describe the extent to which the rules conflict with or duplicate similar rules,  
compliance requirements, or other standards adopted at the state, regional, or federal level.  
Amendment of R 205.127 to define the phrase “bottled water” by adopting the SSUTA’s definition  
will bring Michigan into compliance with the national SSUTA.  
10. Is the subject matter of the rules currently contained in any guideline, handbook, manual,  
instructional bulletin, form with instructions, or operational memoranda?  
Michigan uses the phrase “bottled water” in the GSTA, the UTA, and the Specific Sales and Use  
Tax Rules without providing any definition of the phrase.  
11. Are the rules listed on the department’s annual regulatory plan as rules to be processed  
for the current year?  
No, amendment of R 205.127 is not listed in Treasury’s Annual Regulatory Plan.  
12. Will the proposed rules be promulgated under Section 44 of the Administrative Procedures  
Act, 1969 PA 306, MCL 24.244, or under the full rulemaking process?  
Full Process  
13. Please describe the extent to which the rules exceed similar regulations, compliance  
requirements, or other standards adopted at the state, regional, or federal level.  
The Legislature has designated Treasury as the exclusive agency responsible for the collection of  
taxes. MCL 205.1(1). That exclusive duty is to be carried out through establishment of a  
specialized service for tax enforcement that contains uniformity in definition, regulation, return,  
and payment. MCL 205.1(1)(b). No similar regulations to the Specific Sales and Use Tax Rules  
exist.  
14. Do the rules incorporate the recommendations received from the public regarding any  
complaints or comments regarding the rules? If yes, please explain.  
The amendment to R 205.127 adding the definition of “bottled water” will address the need  
expressed for clarification of whether “sparkling water” is considered nontaxable “bottled water.”  
15. If amending an existing rule set, please provide the date of the last evaluation of the rules  
and the degree, if any, to which technology, economic conditions, or other factors have changed  
the regulatory activity covered by the rules since the last evaluation.  
Review of all Specific Sales and Use Tax Rules is ongoing currently. Technology, economic  
conditions, or other factors have not changed the regulatory activity covered by the rules since the  
last evaluation in 2013.  
16. Are there any changes or developments since implementation that demonstrate there is no  
continued need for the rules, or any portion of the rules?  
MCL 24.239  
RFR-Page 3  
No. The continued need for the Specific Sales and Use Tax Rules is certain.  
17. Is there an applicable decision record (as defined in MCL 24.203(6) and required by MCL  
24.239(2))? If so, please attach the decision record.  
No  
MCL 24.239  
;