Lansing — Michigan’s state treasurer said Tuesday he favors forcing Internet retailers to collect the state’s 6 percent sales tax.
Treasurer Kevin Clinton endorsed the so-called “Main Street fairness” legislation requiring Internet retail giants like Amazon.com and Overstock.com to collect and remit the state sales tax for purchases made by customers in Michigan.
“I just think it’s good tax policy to look at this,” Clinton told the House Appropriations general government subcommittee.
Under the state’s sales tax collection law, big box retailers like Wal-Mart and Meijer are required to collect sales taxes for online purchases made by customers in Michigan because they have bricks-and-mortar buildings in the state. Companies without facilities in Michigan, such as Amazon and Overstock, do not have to tack on sales taxes to purchases.
A two-bill package closing loopholes in existing sales tax laws that allow consumers to buy goods tax-free from out-of-state online retailers has been stalled in the House since September. Some lawmakers consider extending the sales tax to Internet purchases a tax increase.
The Michigan Treasury Department estimates the state will lose nearly $290 million this fiscal year from uncollected sales taxes on Internet purchases. 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.
To make the legislation more palatable to lawmakers who consider it a tax increase, Clinton said he’d favor lowering the overall sales tax rate on all purchases to make it revenue neutral. “I want to level the playing field,” Clinton said.
Gov. Rick Snyder, House Speaker Jase Bolger, R-Marshall, and other lawmakers have argued Congress needs to address the issue instead of having a patchwork of state laws requiring retailers to remit numerous different sales taxes.
“I think this is a congressional issue, an inter-state commerce issue,” state Rep. Earl Poleski, a Jackson Republican and chairman of the subcommittee, said after the hearing.