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Wednesday, September 11, 2013

Internet Sales Tax Legislation Moves Forward to Michigan House

Michigan State Capitol
Michigan State Capitol (Photo credit: Wikipedia)

Could a Michigan Internet Sales Tax be around the corner?

Yes, if State House Representative Eileen Kowall (R - Highland) and Rob VerHeulen (R-Grandville) bills are passed into law.

Michigan Sales Tax law requires businesses with a physical presence in the state to collect a six percent sales tax. House Bills 4202 and 4203 would expand the definition of a business physical presence. 

The State House Tax Policy Committee approved the bills in a series of 9-1-5 votes, with five members abstaining to vote for or against pending legislation. Three Democrats, Stacy Erwin Oakes (D-Saginaw), Marcia Hovey-Wright (D-Muskegon) and Andy Schor (D-Lansing)  joined six of 10 Republicans in supporting the measure. State Rep. Aric Nesbitt, R-Lawton was the sole "no" vote.

Kowall and Verhulen's bills seek to classify warehouses, offices, distribution facilities, subsidiaries or affiliate partners in Michigan directing internet shoppers to out-of-state websites in exchange for a commission, would have to comply with collecting the States' 6 percent sales tax from consumers.

Local businesses believe larger out-of-state companies have a competitive advantage on internet related sales under the current version of Michigan Sales Tax law.

Speaker of the Michigan House Jase Bolger (R) states he plans to take a closer look at the bill if makes it out of committee and decide how to proceed. Democratic House Minority Leader Tim Greimel, D-Auburn Hills, will also take a wait-and-see approach.

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