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Old September 20th, 2011, 09:33 PM   #1
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Default Internet Sales Tax

http://www.wnem.com/story/15502189/m...internet-sales
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LANSING, Mich. (AP) - The Michigan Retailers Association is making a renewed push to require more businesses selling items over the Internet to collect the state's 6% sales tax.

Legislation dealing with the issue is expected to be discussed Tuesday at the state Capitol.

The Michigan retail group says some out-of-state, online-only retailers use legal loopholes that allow them to avoid collecting state sales tax at the point of sale.

The retailers association says that gives the online retailers an unfair price advantage and hurts Michigan businesses that have storefronts and collect the sales tax.
This would bum me out if it went through. I like the fact that on some purchases I don't have to pay sales tax. How can Michigan enforce such a law in other states? Would it be more of a "if you don't report your purchases, you're in trouble" kind of thing?
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Old September 21st, 2011, 06:45 AM   #2
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Of course I enjoy the savings I get from not having to pay sales tax on stuff I buy online if they retailer doesn't operate a bricks and mortar location in Michigan but in the long run, it wouldn't make that much of a difference to my pocket book.

I think the original justification for not collecting the sales tax was that internet commerce needed the break to help them grow when the concept was new. That's definitely no longer the case and I agree that making them subject to the tax would help to even the playing field a bit. In the end though, I don't think it will be as much of a boost to local businesses as the Michigan Retailers Association thinks it would be just because people's buying habits have changed so drastically over the years that I don't think the 6% tax being added to online purchases would push that many people back to physical stores... especially for certain purchases like books, music, clothing, shoes, electric gadgets, etc. I cannot remember the last time I went to Best Buy or a book store...

I agree that enforcement will always be an issue. Especially with a lot of the smaller/non-national retailers.
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Old September 21st, 2011, 06:49 AM   #3
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That would put myself and numerous other e-com's out of business in a heart beat.
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Old September 21st, 2011, 07:35 AM   #4
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I already pay enough taxes to support worthless people
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Old September 21st, 2011, 08:23 AM   #5
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Cliff Notes - in time you will pay sales tax on everything you purchase, even over the Internet, so get used to it

I hate to sound like the voice of reason in the politics/religion/govt forum, but the current law already includes all of you that posted since you all list MI locations. MI residents that purchase goods from other states and do not pay the local sales tax at the time of the sale are subject to a variation of the sales tax, called use tax, when they bring those goods back into Michigan. It doesn't matter if the retailer doesn't collect the MI sales tax, and it doesn't matter if you purchased over the Internet, mail order catalogue (yes people still do that) or purchased it out of state and claimed an exemption because you were transporting it back to MI. You are responsible for remitting the correct amount of MI tax. MI Dept of Treas makes it easy for you to report and pay the use tax due on your out-of-state purchases by providing a spot right on your MI-1040 tax return (see line 22). Honestly I have never seen this addressed under audit, especially since we see so few audits of MI individual tax returns, but it's there.

There is also a lot of pressure for bigger businesses that are required to prepare audited financial statements (audited by a CPA not the IRS) to fully disclose all of their potential tax liabilities, especially unreported or underreported state and local tax liabilities. That has resulted in state and local governments making it easier for big businesses to "get right with Jesus" and reprt all of their back tax liabilities, including state sales taxes, under the assumption that they will start collecting and remitting the correct sales taxes based on the ship-to addresses for their customers.
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