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Michigan Wants Remote Sales Tax Revenue


 Michigan Legislature Considers Online Sales and Use Tax Bills.

The Michigan legislature is currently considering two bills, H.B. 4202 and H.B. 4203, that would require online retailers and their Michigan affiliates to collect Michigan sales and use tax. H.B.4203 amends the use tax act, while H.B. 4202 amends the general sales tax act. Both include click-through nexus provisions

Both HB 4202 and 4203 would require remote vendors to collect and remit Michigan sales and use tax if their affiliates meet certain requirements, including, but not limited to:

  • Use employees or facilities in Michigan to advertise or facilitate sales;
  • Maintain "an office, distribution facility, warehouse, storage place, or similar place of business in Michigan to facilitate the delivery of tangible personal property sold by the seller to the seller's consumers;" and
  • "Conducts any other activities in this state that are significantly associated with the seller's ability to establish and maintain a market" in Michigan.

Click-through nexus provisions in both H.B. 4202 and 4203 read:

"If the seller enters into an agreement with 1 or more residents of this state under which the resident, for a commission or other consideration, directly or indirectly, refers potential customers, whether by a link on an internet website,… if the cumulative gross receipts from sales by the seller … is greater than $10,000 during the immediately preceding 12 months."

Michigan Governor Rick Snyder (R) supports state collection of remote sales and use tax. He would like the federal government to "pass legislation allowing states to collect sales tax from online and catalog retailers."

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Gail Cole
Avalara Author
Gail Cole
Gail Cole
Avalara Author Gail Cole
Gail began researching and writing about sales tax in 2012 and has been fascinated with it ever since. She has a penchant for uncovering unusual tax facts, and endeavors to make complex sales tax laws more digestible for both experts and laypeople.