February 26, 2014 at 6:39 pm

Snyder: State should require Internet firms to collect sales tax

Lansing— Gov. Rick Snyder said Wednesday the Legislature should tackle the problem of uncollected sales tax from some Internet purchases, instead of waiting for action by Congress as he’s previously advocated.

“Long term, we still need a federal resolution, but I think there’s more merit to the state having the good dialogue about the topic now than there was a year or two ago,” Snyder told reporters after speaking at a public policy conference of trade association executives in Lansing.

The Republican governor said recent legal opinions about the issue have persuaded him that it’s worth pursuing a state-level legislative fix.

Snyder’s shifting view on the issue came one day after The Detroit News first reported his state treasurer, Kevin Clinton, came out in favor of the so-called “Main Street fairness” legislation aimed at forcing all Internet retailers to collect the sales tax.

Internet retailers like Amazon.com and Overstock.com have been able to legally sidestep Michigan’s tax collection laws for years because they lack a physical presence in the state.

Other retailers, such as small businesses and big box giants like Wal-Mart and Target, are required to collect sales taxes for online purchases because they have stores in Michigan.

Michigan’s Treasury Department has estimated the state will lose nearly $290 million this fiscal year from uncollected sales taxes on Internet purchases.

The governor was asked about Clinton’s endorsement of the legislation while speaking at the Michigan Society of Association Executives’ conference.

Snyder, a certified public accountant, reminded those in attendance that residents are legally required to declare unpaid sales taxes for Internet purchases on their state income tax returns.

About 108,600 taxpayers voluntarily paid $5.87 million in sales taxes from Internet purchases during the first eight months of 2013, according to the Treasury Department.

“A lot of people convey that as a tax increase. I don’t view it as a tax increase,” Snyder said. “I view it as a collection of a tax that’s already due.”

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