LANSING – Saying they are losing business everyday to Internet stores that do not maintain physical sales locations and do not charge sales tax, a number of small Michigan retailers said Tuesday the state should act on legislation that would require Internet sellers to collect sales tax in Michigan.

The storeowners said they were not against Internet sales, and many had their own Internet sales operations, but large Internet-only retailers, such as Amazon, have an unfair advantage over them because those companies do not charge sales taxes.

Jim Hallan, president of the Michigan Retailers Association, said while there is a national issue to resolve on the question of Internet retailers charging sales tax, the state should also take steps, as other states have, to require Internet retailers to charge sales tax. Lawmakers should act on HB 5004 and HB 5005 , which would require Internet retailers to charge sales and use taxes on purchases made in Michigan.

In a press conference, owners of stores across the state said what is particularly galling is how customers will come into their establishments with the specific intent of checking over merchandise they then buy online.

Kim Volz, owner of The Dive Shop in Flint, said last week he spent several hours fitting a customer with scuba gear only to learn later that the customer ordered the same gear online.

And Teresa Wren, owner of Keans in Mason, said she has had customers show off designed handbags, available in her store, that they had just purchased online.

“The last 10 years have been a struggle,” she said.

Hallan called online retailers like Amazon “vapor” retailers, because they have no physical presence. None of the retailers were knocking online shopping, he said, since most provide the service as well. It is the fact these companies do not have to charge the tax.

Matt Norcross of McLean and Eakin Booksellers in Petoskey said his store has had one of its best years in terms of Internet sales.

But his store is also acting as a showroom for people checking over books, and scanning barcodes on their smart phones, to find prices online.

Several of the store owners said customers have said to them they would buy from them if they discounted the value of the sales tax. Lynn MacDowell, owner of MacDowells in Grand Ledge (a store selling fireplaces), said to discount the sales tax would wipe out her margin on a $3,000 item.

The House Tax Policy Committee has held hearings on the bills, but they have not moved yet as small Internet retailers in the state who have associations with Amazon and other online retailers have warned they would be put out of business if the bills passed. Internet giants have warned they will end their associations with those sites if the state enacts the legislation.

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