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Internet Sales Tax Close To Becoming Law In Michigan

Jan 12, 2015

Online shoppers in Michigan could see a sales tax added to their purchases starting next October.

The legislation is now in front of Gov. Rick Snyder.

Supporters say it would end an unfair advantage for retailers such as Amazon.com over stores located in Michigan.

“What really pushed it over the line is the amount of companies that are doing business online,” said Sen. Mike Kowall, R-White Lake. “And you have all the brick-and-mortar people that are dying.”

“It’s really beginning to hurt the people that have the brick-and-mortar and employ all the residents here in the state.”

Online shoppers are already supposed to pay the tax when they file their income taxes every year. But most do not.

Senate Bills 658 and 659 would require retailers without physical locations in Michigan to collect it at the point of sale.

“The law says you must report it at the end of the year when you’re doing your income tax. And if you’re not doing that, by all definition, that’s tax evasion,” said Kowall.

Opponents include conservative groups such as Americans for Prosperity - Michigan. The group says it amounts to a new tax that could stifle competition. It has questioned whether the measure is constitutional, since only Congress has the power to regulate interstate commerce.

The measure passed alongside legislation to boost road funding in Michigan. But it would take effect regardless of whether voters approve a ballot proposal in May, which would increase the state sales tax from six to seven percent to raise money for roads.