The state will require more online retailers to charge Michigan’s sales tax starting Thursday.
Online shoppers are already supposed to keep track of their purchases and pay the six percent tax when they file their returns - but most don’t.
State Senate Democratic Leader Jim Ananich (D-Flint) introduced the legislation last year.
“Hopefully it will start to quickly level the playing field so that local stores all across the state can compete with these big box out-of-state companies,” said Ananich.
The state estimates the so-called “Amazon tax” law will generate about $60 million in revenue. But the state will still lose out on about $400 million in uncollected sales tax.
The Michigan Department of Treasury says that’s from retailers with no physical presence in Michigan.
“Until Congress takes action to allow states to require remote sellers with no nexus to do so, that’s the bigger piece of the pie that’s out there,” said Treasury spokesperson Terry Stanton.
Amazon.com opened corporate offices in Detroit earlier this week. Those offices would have required Amazon to collect sales tax on online purchases regardless of the new law. However, it’s not clear whether the law taking effect factored into the online retailer’s decision to open the location.
Links to legislation: