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Wood pellet users may be paying too much tax

12:34 PM, Dec 8, 2011   |    comments
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People using wood pellets for home heating may be paying too much tax.

GRAND RAPIDS (WZZM) -- You may be paying too much sales tax on your heating bill this winter -- if you use wood pellets for heating.

Michigan raised its sales tax to 6% in 1994, but left the tax for unregulated residential heating fuel -- like propane and wood pellets -- at 4%. But you have to fill out a form buried on the state's website to ask for the lower tax rate.

The state issued a bulletin for the tax exemption in 1994 -- when the sales tax rate changed.

Most stores that sell wood pellets do not automatically give customers the 4% sales tax at check out. Instead, they charge 6%. But stores are not responsible for charging the lower tax rate. Consumers are responsible for requesting the tax exemption.

WZZM 13 On Your Side asked officials at the Michigan Department of Treasury if the exemption -- and form needed to get it -- could be better publicized. A spokeswoman admits consumers could be confused and not realize they need to fill out a form.

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