LANSING – Legislation ensuring the Michigan Department of Treasury can collect sales and use tax from remote sellers – something it already does – passed unanimously through the House on Wednesday.
HB 4540, HB 4541, HB 4542 and HB 4543 passed 110-0.
Under the bills, marketplace facilitators would be those who sell tangible personal property at retail locations in the state whether the seller using the facilitator has a nexus in the state. They would codify department policy Treasury has followed since the U.S. Supreme Court upheld the ability of states to collect sales and use taxes on remote sellers if they met a relatively low threshold establishing a nexus in the state.
The bills would also ensure third-party sale facilitators, like Amazon or Etsy, collect and remit Michigan sales tax.
“This legislation allows us to treat Michigan businesses fairly by imposing the same sales tax requirements on out-of-state sellers,” Rep. Lynn Afendoulis (R-Grand Rapids Township), one of the bill sponsors, said in a statement. “It ensures businesses that sell into Michigan from outside the state do not have an unfair advantage. The Main Street of today is traveled by satellite and fiber optic cable, allowing retailers in Brazil, Vietnam, Ireland and elsewhere to compete as if they are two doors down. This legislation allows us to stand in support of Michigan businesses – to make them and our state even more successful.”
Telecommunication companies received an exemption from the bills as they moved out of the Ways and Means Committee. Rep. Jim Lilly (R-Park Lake) said these companies are already remitting certain taxes and service fees, and the legislation would have affected them differently.
“Because these tax collection mechanisms are already working it really doesn’t make sense to try to reinvent that wheel,” Mr. Lilly said.
