Section R. 205.112 - Premiums and giftsRule 62.
(1) Unless an exemption applies, donors of tangible personal property are regarded as consumers of that tangible personal property and the sale of that property to them is taxable. Similarly, the sale to an employer of tangible personal property for free distribution to its employees may also be taxable, under R 205.76. The sale of goods to be given away for advertising purposes is also taxable.(2) If goods purchased for resale are subsequently given away or used by the retailer, the retailer is liable for use tax on the purchase price of the goods, unless otherwise exempt.(3) The redemption of scrips, whether in the form of punch cards, certificates, box tops, tokens, proofs of purchase, points, or similar promotional consideration for premiums is a taxable sale at retail and sales tax must be paid on the redemption value of the scrips. Sales tax does not apply if the consideration is redeemed for cash rather than for tangible personal property. Premiums acquired for resale purposes are not subject to sales or use tax.(4) Purchasers of tangible personal property to be awarded as prizes, the winning of which depends upon chance or skill, are regarded as consumers of that property and the tax applies to sales of the property to them. Similarly, purchasers of tangible personal property for use in games, promotions, and similar operations, in which each customer receives some merchandise or prize regardless of skill or chance, are regarded as the consumers of that property and the tax applies to sales of the property to them.Mich. Admin. Code R. 205.112
1979 AC; 2023 MR 15, Eff. 8/11/2023