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Thread: Michigan looking at passing Internet Sales Tax equal to regular sales tax 6%

  1. #1

    Default Michigan looking at passing Internet Sales Tax equal to regular sales tax 6%

    To those ADISC members in Michigan and Internet sellers of Incontinence products The Michigan legislature is on the cusps of passing Internet Sales Tax of 6% so any of us who live in Michigan better stock up now or soon you will pay additional 6% on top of your price of the products. Wanted to let the community members of Michigan and internet sellers get a heads up on this .

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    Unless they start requiring customs declarations for all packages coming into the state and somehow compensate the postal service for processing them how do they expect to enforce that?

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    Sites automatically will add the tax when you check out if they see it is shipping to that state. Some online stores already add on the tax even though I live in an as of yet untaxed state. You may be able to find small sites not taxing you, but most stores will not want to risk breaking the law by withholding tax dollars.

    Also taxing online purchases is not cool. Not cool at all. I hope it does not pass.

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    There's been talk about the Fed becoming involved in this. I think it's just a matter of time before an added sales tax to internet sales becomes nationally based.

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    Is this an extra tax over the regular goods and services tax, or are internet purchases not yet taxed in the united states?

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    Typically sales tax was handled by state law that assumed both the vendor and seller existed in the same state. To use the legal definition the vendor had a "physical presence" within the same state be it an office or wearhouse, etc.

    Here's a little reference reading on the topic:

    Sales on Internet for the past two decades has kind of been a taxing loophole of sorts because it involves interstate commerce and the Federal Government has (until 2013) not really had any plans on the table. An understood reason being because it would put substantial burden on small companies to be aware of tax law in all 50 states without the revenue to support their own legal or financial department.

    On the other side, supporters argue that citizens are supposes to report Internet purchases as a Use Tax, but people rarely do, don't know about it, and it's practically impossible to enforce (I'd like to hope the government can't access my Amazon purchase history).

    As of now though the Federal bill is effectively dead for the second time because it didn't get though this Congress nor the Congress before it (not that I'm complaining).

    History about the latest version of the bill:

    Back to the OP though, because this is Michigan law the above is somewhat tangential because the law could only apply to companies within Michigan and Michigan based buyers. I'm going to assume that this is what you're referring to:

    I can't find anything on its progress in the Michigan House however other than Michigan Congress usually adjourns on December 18th.

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    Figured that Gary and Nicolas from XP Medical has a warehouse in Michigan and they are based out of California they did not know about this and also any Michigander in the community who was not keeping up on things I would pass it along also for those who purchase from Michigan based companies should prepare for 6 % additional expenses if the state lawmakers get their way. The basis of this law is to capture sales tax revenue from companies like Amazon and Ebay and other companies that do not already collect sales tax from Michigan purchasers or those out of the state buying things inside the state of Michigan local business owners are whining that Amazon and Ebay and other companies have unfair advantage of a 6 % savings and wont buy locally. They want a level playing field to other retailers nationwide. State claims they are missing out on millions in extra revenue from this "loophiole" and want to fix it.

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    I can't really he upset about this. It sucks a little because it's a burden on companies and if they're emulated by other states, every company will be required to alter its rates based on buyer location.

    But honestly, shipping already does that and I'd bet that UPS and FedEx would be happy to make a program that calculates tax rates in tandem with shipping rates.

    A 6% sales tax isn't even that high compared to a lot of places.

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    ^^ I'm with you there. I mean, I don't want to pay additional tax, but it's not like I'm buying stuff off the internet to dodge the Michigan tax in the first place. I usually throw $6 or $12 for the self-declared use tax on the Michigan tax return based on their estimation tables and call it good.

    Really, this is one of those instances where the current right-wing government is trying to avoid raising "taxes" by raising fees, creating new fees, and "closing loopholes." I'd be less bothered by it if they would just be honest about what they're doing in the first place. There's all sorts of political conversations that could start from there, but I'll leave it there.

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