Mich. Admin. Code R 205.74 — Educational institutions

Rule 24. (1) Sales, not for resale, to regularly organized educational institutions
not operated for profit are not taxable. "Not operated for profit," as used in this rule,
means operated by an entity of government, a regularly organized church, religious or
fraternal organization, where the
income from the operation does not inure, in whole or in part, to the benefit of
individuals or private shareholders, directly or indirectly, and where the activities of
the entity are carried on exclusively for the benefit of the public at large and are not
limited to the advantage, interests, or benefits of its members or a restricted group.
"Educational institution," as used in this rule, means an institution of learning,
organized solely for educational purposes, which maintains a faculty of
qualified instructors, and teaches regular, continuous courses of study, and which
confers upon students a recognized diploma after completion of a specific curriculum.
(2) Sales of athletic equipment to a regularly organized educational institution
for consumption or use are not taxable if the athletic activities are under the
management and control of the educational institution and the entire receipts are
expended for athletic or educational purposes.
(3) Educational institutions which are not operated for profit, and which
operate lunchrooms, cafeterias, or dining rooms for the exclusive use of bona fide
enrolled students, are not taxable. Whenever such a lunchroom, school cafeteria,
or dining room sells to nonstudents, including teachers, the institution operating it is
subject to the tax on those sales.
(4) Sales of class pins, rings, and similar articles are taxable when paid for,
directly or indirectly, by the students.
(5) Sales to educational associations, parent teacher organizations, teachers,
and other personnel of an educational institution are taxable.
(6) If an exemption is claimed, then at the time of the transfer of the tangible
personal property, the seller shall retain, as part of the seller's records, an
executed exemption certificate which reads as follows:

CERTIFICATE TO BE EXECUTED WHEN TAX EXEMPT SALE
IS MADE TO AN EXEMPT INSTITUTION OR AGENCY

The undersigned hereby certifies that the item or items being purchased are to be
used or consumed in connection with the operation of the exempt institution or agency
named in the space provided below and that the consideration for this purchase
Courtesy of Michigan Administrative Rules
moves from the funds of the designated institution or agency. In the event this claim
is disallowed the transferee promises to reimburse the seller for the amount of tax
involved.

_________________________________________________
Name of exempt institution or agency

Date ___________________________

__________________________________________________
Signature and title of person making certification

(7) Schools operating a kindergarten through twelfth grade program are not
required to pay tax on the sales of textbooks to enrolled students. Sales of textbooks to
nonstudents are taxable. Sales of yearbooks and annuals to both students and
nonstudents are taxable.