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Michigan Coalition Calls For Internet Sales Tax Bill Passage

The Michigan Legislature is being called upon by the Michigan Association of Recreation Vehicles and Campgrounds (MARVAC) to seriously consider and pass House Bill 5004 and House Bill 5005.

The Daily News reports that “…retailers renewed calls for the legislature to take action on bipartisan legislation to close the online sales tax loophole.” Michigan’s Main Street Fairness Acts HB5004 and HB5005 were written as complementary bills.

House Bill 5004 amends the General Sales Tax Act to define presumptions of “…when a person selling tangible personal property is engaged in the business of making sales at retail in Michigan.”

House Bill 5005 creates seller liability to collect/remit use tax if selling tangible property in Michigan. This law will apply “…when purchases are made out of state, from catalogues, or over the internet for use or consumption in Michigan.”

The bills also define an affiliate for purposes of sales tax collection. If an affiliate:

  • "Sells a similar line of products…under the same business name…or a similar business name.
  • Uses its employees in this state…to advertise and promote or facilitate sales by the seller to customers in this state.
  • Maintains an office, distribution facility, warehouse, storage place or similar place of business…to facilitate delivery of tangible personal property sold by the seller to the seller’s customers in the state.
  • Uses trademarks, service marks, or trade names in Michigan that are the same or substantially similar to those used by the seller.
  • Delivers, installs, assembles, or performs maintenance or repair services for the seller’s customers in the state.
  • Facilitates the sale of tangible personal property to customers in the state by allowing…pickup or return [of] tangible personal property…at an office, distribution facility, warehouse, storage place, or similar place of business maintained by that affiliated person in Michigan.
  • Conducts any other activities in Michigan that are significantly associated with the seller’s ability to establish and maintain a market in the state for the seller’s sales of tangible personal property to customers in the state."

Lansing-based Public Sector Consultants studied the effects of the “sales tax loophole” that prevents the state from requiring out-of-state vendors to collect sales tax. They say the “…sales tax loophole has a significant negative impact on job makers and the state’s economy. The study found that closing the loophole would directly lead to the create of as many as 1,600 new jobs, would increase investment in Michigan’s economy in the form of sales at brick-and-mortar retail outlets by as much as $126 million per year and would save the state as much as $141.5 million in otherwise lost sales tax revenue from electronic remote sales in 2012 alone.”

The MARVAC, Michigan Retailers Association, Michigan Grocers Association, Michigan Agri-Business Association and other Michigan retailers formed the Michigan Alliance for Main Street Fairness.

Michigan residents seem to agree. Read "Michigan Internet Sales Tax Bill Gets Thumbs Up."

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Avalara Author
Susan McLain
Avalara Author Susan McLain
Susan McLain began her career as a technical writer in technology industries such as satellite networking and medical devices. Her skills encompass technical and marketing writing, usability engineering, verification and validation testing and protocol writing, requirements development, business analysis, technical illustration/graphic design and marketing. She has owned her own business providing service to small to medium sized business and in other positions, she has been in project management, documentation and marketing. She is currently the content specialist for Avalara helping to “make sales tax less taxing.”