Department of Treasury

State Treasurer

GENERAL Sales and Use Tax Rules

SPECIFIC SALES AND USE TAX RULES

Filed with the secretary of state on

These rules take effect immediately upon filing with the secretary of state unless adopted under section 33, 44, or 45a(6) of the administrative procedures act of 1969, 1969 PA 306, MCL 24.233, 24.244, or 24.245a.  Rules adopted under these sections become effective 7 days after filing with the secretary of state.

(By authority conferred on the Department of Treasury by section 3 of 1941 PA 122, MCL 205.3)

R 205.127 of the Michigan Administrative Code is amended, as follows:

R 205.127   Water

  Rule 77.   (1) Sales of water are taxable except when delivered in any manner other than through water mains, sold in bulk tanks in  quantities  of  not  less  than  500  gallons  to  a consumer, or sold as bottled water, or sold for an exempt use. are taxable, regardless of the use or  purpose of the water, unless exempt under R 205.90 or R 205.51.

    (2) The sale of equipment, tools, machinery, pipes, fittings  and  supplies to a person for consumption or use in  distributing  and  carrying  water  is taxable. Sales of tangible personal property for installation as a component part of a water pollution control facility are exempt if the facility was issued an exemption certificate under part 37 of the natural resources and environmental protection act, 1994 PA 451, MCL 324.3701 to 324.3708. 

(3) “Bottled water” means water that is placed in a safety sealed container or package for human consumption. Bottled water is calorie free and does not contain sweeteners or other additives except that it may contain: (i) antimicrobial agents; (ii) fluoride; (iii) carbonation; (iv) vitamins, minerals, and electrolytes; (v) oxygen; (vi) preservatives; and (vii) only those flavors, extracts, or essences derived from a spice or fruit. "Bottled water" includes water that is delivered to the buyer in a reusable container that is not sold with the water.