Michigan

In an effort to avert a full government shutdown and address the state’s budget deficit, the Michigan State Legislature passed a tax on services, including “massage,” on October 1, 2007. There are two bills being considered by the legislature at this time. One, SB 838, would repeal the tax before it’s even been implemented. The other, SB 845, would delay the implementation of this tax until December 20, 2007. Because the state of Michigan has not defined “massage therapy,” it remains unclear how this tax might be implemented. In the few states that currently tax massage, responsibility has remained with the service provider (massage practitioner) to determine which of the following categories they fall into. This leads ABMP to believe that most massage therapy services will not be taxed. The Michigan Department of Treasury routinely uses The North American Industry Classification System (NAICS) to apply sales tax by category. This is important in determining how the Department would tax “massage” if the tax goes into effect. Treasury has noted that an establishment classified under “Other Personal Care Services- 812199” would be subject to the newly expanded service tax. This includes “massage parlors.” Because this definition falls under personal care, ABMP interprets this class as mostly spa-type relaxation massage services. Treasury further noted that an establishment classified under “Offices of all Other Miscellaneous Health Practitioners- 621399” would not be subject to the expansion of the sales tax. This includes “massage therapists offices” as well as a wide variety of natural healing clinics and centers. ABMP believes most massage therapy services will fall under this category. ABMP will keep members informed as the Michigan legislature determines how to proceed. This debate is far from over. ABMP encourages all members to contact your legislators and voice your opinion. If you don’t know who your representatives are, you may use the following links. To find your state senator, go to: http://senate.michigan.gov/SenatorInfo/find-your-senator.htm To find your state representative, go to: http://house.michigan.gov/find_a_rep.asp