Michigan requires sales tax collection and remittance

[b86fiero]

Heard on 13 ABC Action News Monday evening (8/13),  the Michigan legislature has passed a law requiring sales tax collection and remittance for all online sales to residents of Michigan beginning in October of this year.

No additional details on the wording of the statute nor how the collection / remittance is supposed to be handled by sellers at this time.

Good luck to us all!!! 

[vikingsandpintos]

I am in Michigan. I haven't seen anything in print yet, but the local radio talkshow host was talking about it today. Said out of state sellers will have to collect 6% sales tax from Michigan buyers if they sell more than $100,000 or 200 transactions per year. I would guess more details will be coming soon. Sigh.......

[needful_little_things]

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@vikingsandpintos wrote:

I am in Michigan. I haven't seen anything in print yet, but the local radio talkshow host was talking about it today. Said out of state sellers will have to collect 6% sales tax from Michigan buyers if they sell more than $100,000 or 200 transactions per year. I would guess more details will be coming soon. Sigh.......

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$100,000 or 200 transactions, for out of State sellers, is that a parameter for sales in Michigan alone ?.

So that I make myself clear, if an out of State seller only has 10 transactions or $5000 worth of sales in the State of Michigan, they are exempt ?. 

[the*dog*ate*my*tablecloth]

In general the minimum level of sales is for sales to that state only. One of the concerns addressed in the Supreme Court ruling was not burdening small sellers. If those limits were for all sales then most sellers would be burdened by many states.

[ersatz_sobriquet]

I hope you're right...we will have to wait and see how it plays out. 

[vikingsandpintos]

That wasn't clear on the radio... I don't know if the new legislation was vague, or he didn't fully understand it. I'm not sure which way it is, still haven't seen it written yet. The way our leaders are, not sure if THEY know, or if it is even public yet, smh. Either way, doesn't bode well if 50 states start having 50 sets of rules, plus any local/city type laws... Who can keep track of all that?!

[johnrj1226]

https://www.freep.com/story/news/local/michigan/2018/08/13/michigan-sales-tax-online-purchases-octob...

[hioctane62]

https://www.detroitnews.com/story/business/2018/08/13/michigan-enforce-sales-tax-online-out-state-re...

This is apparently a law that's been on the books since 2015, but they are just this year able to enforce it with the recent high court rulings.

[lacemaker3]

Duplicte of earlier posts.

[lacemaker3]

Here's some new info - this is a link to the bill, which was passed Aug 1:

https://www.michigan.gov/documents/treasury/RAB_208-16_629240_7.pdf

page 2:
...
After September 30, 2018, a seller that has sales into this state (both taxable and non-taxable) exceeding $100,000, or a seller that completes 200 or more separate transactions of sales into this state (both taxable and non-taxable) in the previous calendar year has nexus in Michigan and is required to remit sales or use tax on all of its taxable sales into Michigan and file all required returns.

Remote sellers must review their 2017 calendar year sales (i.e., January 1, 2017-December 31, 2017) to determine if they have exceeded either of the economic nexus threshold, and therefore have nexus in Michigan after September 30, 2018. Remote sellers that only have nexus due to exceeding either of these economic thresholds are not liable for any tax, penalty, or interest for any transactions occurring on or before September 30, 2018.
...

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Here is another article that provides some information:

http://www.crainsdetroit.com/article/20180814/news01/668416/michigan-wants-to-put-internet-sales-tax...

Sellers who are located in Michigan and websites like Amazon are already required to collect and remit sales tax on internet sales, and have been since Oct 1 2015.

https://www.freep.com/story/news/local/michigan/2015/01/15/michigan-internet-sales-tax/21818805/

[dirk12955]

200 sales or $100,000.00 in sales, in 12 months, in Michigan

If I sold $100,000 to Michigan residents I'd be very happy to collect the sales tax and

remit it to the state.

[lacemaker3]

I think that, if sellers are concerned about being able to meet these various requirements being passed by different states, they might want to look into the Streamlined sales tax organization.

The Streamlined Sales Tax Governing Board has contracts with certified service providers (CSP) that can handle nearly all of a seller’s sales and use tax responsibilities.  Any remote seller registered through the SSTRS may contract with a CSP. There is no charge for CSP services in the Streamlined States where the seller is a remote seller.  

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The CSP services are paid for by the states who receive the sales tax revenue.

Michigan is a full-member of the Streamlined Sales Tax organization, so their CSPs can handle all of a seller's obligations for Michigan and many other states.

[nowthatsjustducky]

So if an individual manages to do 200 sales to Michigan in a year through their own little web site, or anywhere else where the venue doesn't control the financials; and that person is not a citizen of Michigan, and has no business or any other presence in the state; how are they going to enforce this?

[lacemaker3]

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@nowthatsjustducky wrote:

So if an individual manages to do 200 sales to Michigan in a year through their own little web site, or anywhere else where the venue doesn't control the financials; and that person is not a citizen of Michigan, and has no business or any other presence in the state; how are they going to enforce this?

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I don't know. 

Other states are requiring payment processors e.g. PayPal to provide 1099 forms for all sellers who exceed the state's thresholds.

[7606dennis]

Not having seen the language of the legislation it is impossible to determine anything concrete.  However, in view of the Supreme Court's recent ruling, I suspect that more and more states will follow suit.  While many states already have USE tax laws in place, most have found it nearly impossible to collect it from their citizens.  Thus it appears that they will now attempt to force out of state sellers into being their tax collection agents.  Even those with no nexus in the state.  For the sake of the residents of those states, let us hope that such legislation doesn't lead to fewer sellers being willing to sell to them.  It could simply result in residents of those states being faced with having to purchase things from larger companies or from local in-state businesses.