Michigan to Start Mandating Collection of Online Sales Taxes
By Paul Egan
Retailers on Thursday praised Gov. Rick Snyder for signing legislation they said would help put them on a level playing field by requiring large online retailers such as Amazon to collect and remit the state's 6% sales tax.
The "Main Street Fairness" legislation is aimed at requiring large Internet retailers with a presence in Michigan, such as Amazon, to collect and remit the state sales tax on Michigan purchases, starting Oct. 1.
The bipartisan legislation was pushed by traditional retailers who say tax-free Internet sales are unfairly undermining their businesses.
"Local brick-and-mortar businesses drive our economy and without implementing this fix, whey will continue to serve as showrooms for online retailers," Snyder said.
The legislation applies to online retailers with a "physical presence" in Michigan. A list of online retailers considered subject to the law wasn't available from the state government Thursday, but officials said it would apply to large online retailers such as Amazon and Overstock.
"Thank you for stepping up and doing the right thing," Barb Stein, owner of the Great Northern Trading Co. in Rockford, told Snyder at a ceremonial bill signing.
Some critics say it's wrong to "tax the Internet," but Snyder said Internet sales are already subject to Michigan sales tax. State residents who purchase goods online are supposed to remit the tax voluntarily through their income tax returns, though few do.
Scott Hagerstrom, Michigan director of the anti-tax group Americans for Prosperity, said the new law is "definitely a tax increase." He said: "Lansing seems to know how to do one thing, and that is take more money out of the pockets of hard-working families."
An e-mail seeking comment from Amazon was not immediately returned.
The legislation is expected to generate about $60 million a year. Snyder said that amount would increase significantly if the federal government passed legislation forcing the collection of sales tax on all online sales.
The bills were sponsored by Democrat Jim Ananich of Flint, now the Senate minority leader, and Republican Eileen Kowall, who was in the state House.
Also Thursday, Snyder vetoed Senate Bill 78, saying it would have restricted tools the Michigan Department of Natural Resources could use to manage forest for biodiversity and also could have threatened a certification process for forests that he said is critical to Michigan's forest products industries.
"Biodiversity is essential to how our world-class natural resources are managed," Snyder said. "While there are opportunities to look into our forest management practices, reducing biodiversity authority will only cause confusion and hurt our forests."
The Michigan Environmental Council praised the veto, saying that by blocking the DNR from designating land to protect biological diversity, the bill sponsored by Sen. Tom Casperson, R-Escanaba, "would have undermined the scientific principles that have long been the foundation of land management in Michigan."
Snyder announced a slew of other bill signings Thursday and the veto of four other bills, including a controversial bill to abolish county gun boards, Senate Bill 789.
The bills Snyder signed Thursday included House Bills 5439 and 5440, which allow the Michigan Department of Agriculture and Rural Development or state colleges and universities to grow industrial hemp for academic purposes.
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