Michigan Gov. Rick Snyder signed legislation Thursday that requires large online retailers in Michigan to collect and remit the state’s 6% sales tax starting October 1. The law is expected to bring in about $60 million a year.
Traditional retailers, who have long advocated for the “Main Street Fairness” legislation, believe that tax-free Internet sales are unfairly undermining their business.
“Local brick-and-mortar businesses drive our economy and without implementing this fix, they will continue to serve as showrooms for online retailers.” – Governor Rick Snyder
The bill applies to online retailers with a “physical presence” in Michigan, but officials have said that the law would apply to online retail giants like Amazon. Opponents of the new law maintain that taxing the Internet is wrong, but Snyder says that Internet sales are already subject to Michigan sales tax. Michigan residents who buy goods online are supposed to voluntarily remit the tax on their income tax returns, but few do and enforcement of that ad-hoc approach is difficult.
“Lansing seems to know how to do one thing, and that is take more money out of the pockets of hard-working families.” – Scott Hagerstrom, Michigan director of the anti-tax group Americans for Prosperity, calling this a ‘tax increase’