Mich. Admin. Code R 205.4105 — Electronic data interchange requirements

Rule 5. (1) Where a taxpayer uses electronic data interchange processes and
technology, the level of record detail, in combination with other records related to the
transactions, shall be equivalent to the level of reco rd detail contained in an
acceptable hardcopy record. For example, the retained records should contain
information including, but not limited to, the vendor name, invoice date, product
description, quantity purchased, price, amount of tax, indication of tax status, and
shipping detail. The taxpayer may use codes to identify some or all of the data
elements, provided that the taxpayer provides a method that allows the department to
interpret the coded information.
(2) The taxpayer may capture the information necessary to satisfy subrule
(1) of this rule at any level within the accounting system and need not retain the
original EDI transaction records provided that the audit trail, authenticity, and integrity
of the retained records c an be established. For example, a taxpayer using electronic data
interchange technology receives electronic invoices from its suppliers. The taxpayer
decides to retain the invoice data from completed and verified EDI transactions in its
accounts payable system rather than to retain the EDI transactions themselves. Since
neither the EDI transaction nor the accounts payable system captures information
from the invoice pertaining to product description and vendor name (i.e., they contain
only codes for that information), the taxpayer also retains other records, such as its
vendor master file and product code description lists and makes them available to
the department. In this example, the taxpayer need not retain its EDI t ransaction for tax
purposes.