Michigan House set to vote on Internet retail sales tax
Lansing — The Michigan House is set to vote Wednesday on a long-stalled bill that would require some Internet retailers to collect the state’s 6 percent sales tax.
The two-bill package would require retailers with a physical presence in Michigan to collect and remit taxes on all sales to Michigan residents, including Amazon.com, which has a subsidiary based in Grand Haven.
Other online retailers such as Overstock.com that don’t have facilities in Michigan could continue selling items without collecting the sales tax in the absence of federal legislation requiring all state-level sales taxes be collected, said Rep. Rob VerHeulen, R-Walker.
Dubbed the “Main Street Fairness” act, the Michigan Retailers Association has been lobbying for several years for the legislation to level the retail playing field with Internet outlets.
Projections on how much additional revenue the state could reap varies between $60 million and $200 million, VerHeulen said.
VerHeulen said he doesn’t view the legislation as a tax increase or “revenue generator.”
“That tax is owed,” Verheulen said. “It’s simply a question of fundamental fairness where we’re requiring brick-and-mortar retailers to collect the tax. The tax is owed by the consumers, so we’re creating a level playing field.”
House Bills 4202 and 4203 expand the definition of what constitutes a physical presence in Michigan to include retailers like Amazon.
The state Treasury Department estimates $482.4 million in sales and use tax from out-of-state purchases went uncollected during the 2013-14 fiscal year, with $289.4 million being directly attributable to Internet purchases.
In 2013, 108,600 taxpayers voluntarily paid $5.87 million in sales taxes they owed on their income tax forms.
Big box retailers with stores in Michigan, such as Wal-Mart and Meijer, are already collecting sales tax on purchases customers make on their websites.
The Internet sales tax bills have languished in the House since September 2013 when the Tax Policy Committee advanced them to the floor.
Similar legislation recently passed out of a Senate committee, giving the proponents hope they can get the legislation passed before lawmakers adjourn Dec. 18 for the year.