Michigan: New Tax Requirements for Out-of-State Sellers
- Feb 25, 2015 | Gail Cole
On October 1, 2015, Michigan will become the 23rd state to impose sales and use tax on out-of-state sellers. To help those sellers adjust to the new tax landscape, the Michigan Department of Taxation has published a notice of new sales and use tax requirements for remote vendors.
As explained by the department:
“The new law creates a presumption that a seller is engaged in the business of making sales at retail in Michigan if the seller, or another person on the seller’s behalf, engages in or performs certain activities set forth in the new statutory sections in Michigan. In addition, a seller will be presumed to be making sales in Michigan if the seller enters into an agreement with one or more Michigan residents under which the resident, for a commission or other consideration, refers potential purchasers (e.g., by a link on an internet website or an in-person oral presentation), to the seller.”
Affiliate or click-through nexus legislation such as Michigan’s is becoming an increasingly popular way for states to obtain tax revenue from out-of-state sellers. At the federal level, legislation that would grant all states the right to tax remote vendors was approved by the Senate in May 2013 but has been stalled in the House.
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