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Frank A. Douglass Insurance Agency

Internet Retailers Must Charge Sales Tax, Law Says

It has taken more than a decade, but the Michigan Retailers Association has finally achieved their goal of requiring some internet retailers to charge the state’s sales tax at the time of an internet purchase.

Governor Rick Snyder has signed the so-called “Mainstreet Fairness Act” legislation approved during the waning days of the lameduck legislature.

MRA President Jim Hallan calls the measure a “victory for the home team” by leveling the playing field and insuring that internet retailers have to play by the same rules as brick and mortar retailers in Michigan.

Under the bills, retailers with an established location in Michigan are required to charge the state sales tax at the time of internet purchase, instead of leaving it up to consumers to voluntarily report such purchases on their annual tax form, which few have been doing.

Hallan has said however that while internet sales in Michigan should generate more than $400 million a year in tax revenue, the legislation will only recover about $50 million dollars annually.

But he adds since 75% of the state sales tax goes to the State School Aid fund, it will still be a benefit for schools.

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