Recent Sales and Use Tax Developments
General Motors v Michigan Department of Treasury. The Michigan Supreme Court ruled that parts which a GM dealer installs that are no longer under warranty as goodwill policy adjustment are not subject to sales tax. Parts installed under warranty are not subject to sales tax. GM’s warranty provided that GM may make warranty policy adjustments even though a part is not under warranty. Treasury’s position is that they were not under warranty so they are taxable. Supreme Court ruled that they were a warranty replacement, even though discretionary, and not subject to sales tax.
Recent Sales and Use Tax Developments