Posted on Fri, May 11, 2012 : 5:22 p.m.
Snyder wants Michigan to collect taxes on online sales
By Cindy Heflin
Gov. Rick Snyder wants Michigan to collect sales tax on all online purchases, MLive reports.
In a letter this week, Snyder urged the U.S. Senate to pass the Marketplace Fairness Act, which would allow states to treat online and brick-and-motor sales the same.
Online retailers like Amazon currently don't have to collect sales tax on purchases.
AP photo
Technically, Michigan residents are required to pay a 6 percent use tax on their online purchases through their income tax returns. But many people fail to do so.
Snyder said the law as it currently stands affords online sellers an unfair advantage.
Comments
bobslowson
Tue, May 15, 2012 : 5:52 p.m.
Another one of those Snyder job creation thingies...you know, the one he ran his whole campaign on?
Jay Thomas
Sat, May 12, 2012 : 9:10 p.m.
This is an easy decision to make for any governor of either party. It should be collected by the merchant and not rely on some kind of honor system. When the internet was young there was an argument to be made for giving online retailers some breathing room to get going. These days they are the giants and have put so many bricks & mortar sales tax collecting businesses out of business that it is really a no brainer.
justcurious
Sat, May 12, 2012 : 3:39 p.m.
Well, I'm sure glad I've been stocking up with online purchases so I don't have anything more to buy. I'll take online shopping any day over getting dressed, driving the car somewhere, buying gas for the car, looking for a parking space, dealing with crowds and lines, finding out the store doesn't even carry what I want, getting bad customer service, driving to another store or two, paying more than online, battling traffic, coming home empty handed, tired, cranky and maybe broke. Yes, I should be taxed yet again for not putting up with buying local.
ffej440
Sat, May 12, 2012 : 8:30 p.m.
Amen brother
Maxwell
Sat, May 12, 2012 : 2:15 p.m.
"If Michigan begins to collect sales tax on online items, I will move. It's that simple." Just in case you missed it - this is a proposed federal law, meaning you'll pay the prevailing tax rate no matter where you move to.
Robert Granville
Sat, May 12, 2012 : 1:37 p.m.
I sincerely hope he joins the Romney campaign and quits. If Michigan begins to collect sales tax on online items, I will move. It's that simple. Without the ability to save money online, my budget would collapse. Many self-reliant students are in the same boat. The only thing I regularly buy in a physical store is food.
Left is Right
Sun, May 13, 2012 : 3:10 a.m.
Robert, you owe 6% Use Tax for the items you buy online in any case. You have been declaring it and paying it on your MI 1040 each year, correct?
clownfish
Sat, May 12, 2012 : 12:55 p.m.
Gee, I don't recall Gov Snyder bringing this tax increase up in any of his campaign speeches. Wonder why? If internet companies can figure shipping to any of the thousands of zip codes instantly I am sure they can handle 50 different tax rates with no problem.
Maxwell
Sat, May 12, 2012 : 7:41 p.m.
re SonnyDog09 If a little old mom & pop shop has software that can do (like mine) I'm guessing anyone can.
clownfish
Sat, May 12, 2012 : 5:27 p.m.
According to the U.S. Census Bureau and other sources, there are at least 40,000 five-digit zip code areas in the U.S. In a period of one year, November 2006 to 2007, around 200 zip codes were added in the U.S. I used the GOP definition of "tax increase"-which is any tax break that is due to expire is a "tax increase", any tax that is not currently being collected is a "tax increase" etc.
SonnyDog09
Sat, May 12, 2012 : 3:51 p.m.
Nonsense. Today there are over 9000 state and local sales tax jurisdictions in the US. The tax rates vary depending on the item that is sold. The jurisdictions are not aligned with zip code, so determining which tax applies cannot be easily done using the shipping address. The solution is not as simple as "importing a spreadsheet." Who maintains the spreadsheet? Who is responsible when it is incorrect? Here is a good summary of the history and complexity of the issue. http://www.taxfoundation.org/news/printer/27803.html
Brad
Sat, May 12, 2012 : 2:30 p.m.
It would be extremely trivial for a computer. If you told Amazon that they had to do it they'd be doing it by this time tomorrow.
Maxwell
Sat, May 12, 2012 : 1:59 p.m.
It is actually as simple as importing an excel sheet into your billing software. Have you ever heard of Turbo Tax? Quick books?
SonnyDog09
Sat, May 12, 2012 : 1:41 p.m.
It is more than 50 tax rates. There are county and city sales taxes, as well. Some goods are taxed at different rates. Determining exactly what sales tax should be charged on each purchase is non-trivial.
Brad
Sat, May 12, 2012 : 1:24 p.m.
A "tax increase"? The tax rate remains at the same 6%. That's like saying if I haven't been paying the IRS and they catch me and make me pay that it's a "tax increase". Sounds like tea party logic to me.
Maxwell
Sat, May 12, 2012 : 1:10 p.m.
I'm not sure how enforcing an existing tax is a tax increase but you are correct on your second statement, this is hardly a logistics issue in its implementation.
Maxwell
Sat, May 12, 2012 : 12:29 p.m.
@ SonnyDog09 Its an end user tax. Its not meant to be a inventory tax on merchants, rather it is a tax on consumption. State law requires Michigan residents to pay it on all purchases they make regardless of where the purchase is made. @ Tru2Blue76 May I suggest you do a little research on Amazon's labor practices, it is pretty shameful.
SonnyDog09
Sun, May 13, 2012 : 3:15 p.m.
"State law requires Michigan residents to pay it on all purchases they make regardless of where the purchase is made. " But now, the state wants an out of state retailer to become the tax collector. If the state wants to collect taxes, the state should do the work of collecting those taxes. I know that governments routinely require other people to do their work for them, but there are limits .
4Bells
Sat, May 12, 2012 : 12:05 p.m.
One sneaky, insidious tax increase after another! One ill-advised tough decision after another! If you are a person who still can't see & feel the agenda attacking Michigan's average citizen, you've got your blinders on. Where will "One Tough Sly Nerd strike next"?
Tru2Blu76
Sat, May 12, 2012 : 7:27 a.m.
Hmm, it's hard to pin down the Republican logic behind any scheme to make ordinary folk pay (in one way or another) for virtually everything while making absolutely sure that ALL companies get more and more encouragement to avoid paying virtually anything IN THIS COUNTRY to help keep THIS COUNTRY rolling along. It's one thing to tout actions helping small Michigan based businesses, but in reality Republican policies give across the board favor to all companies. If Republicans like $nyder want "standardization" nationally so Michigan companies get tax money they are supposed to pass on to the State Treasury, then it's just as logical to have a national law to ensure that workers in ALL states get comparable wages & benefits. As it is: big companies are given tax breaks and even have states with anti-union laws to ENSURE they can force workers to accept lower pay for the same work done by higher paid workers in "competing states." Studies show: "open shop" states have lower economic standards, poorer educational systems and that people have less insurance and generally, a lower standard of living. This is called: The Race to the Bottom - and that means citizens are being forced to race to the bottom economic rung even though they work just as hard and faithfully. It's clear: companies threatening to move factories & offices to "more favorable states" are guilty of extortion. Republicans: are only too happy to make US pay the extortion demands. Just a clue: getting more businesses to come to Michigan is doing nothing to get people TO STAY in Michigan. People are not leaving solely because of a dearth of jobs, they're also moving out because they can't find jobs which provide adequate income!! The entire Republican Party should be OFFSHORED.
Richard Wickboldt
Sun, May 13, 2012 : 12:02 p.m.
Very well said and so true. If this keeps going on and the 1% keep getting more of the $$$ and the rest of us get poorer, and the standard of living continuously lowers. History clearly shows there is a point where the general populace will not take it any longer and take some sort of action to reverse their unfortunate fate. In a country with hundreds of millions of guns owned by the general populace. I am sure it will be very messy. Right now the Federal Reserve is basically just printing as much money as possible at a very fast pace to keep the judgment day at bay all the while making the 1% even richer. With $17 trillion in federal debt and climbing and no plan in place to reverse the trend; never mind figuring how to pay it off. The value of money will be drop off a cliff and the government from the feds to the local will be raising taxes and fees.
u812
Sat, May 12, 2012 : 11:08 p.m.
Amen!
Maxwell
Sat, May 12, 2012 : 5:01 a.m.
This is an tax dodge that rewards big business and the tax dodgers at everyone else's expense. Why should just local merchants be handicapped by a six percent tax? All so some cheapskates can avoid paying sales tax they are legally obligated to pay? At the expense of roads, schools, police and fire protection? Scream "socialist" all you like. Personally I think this is where the anti tax argument crosses the line to anti social. And this is one of the few instances where I actually agree with Governor Snyder.
Jake C
Sat, May 12, 2012 : 10 p.m.
SonnyDog -- Except amazon.com isn't paying the tax, the Michigan-based consumer is. Amazon would merely collect & then remit the tax to the appropriate government authorities. Not that I agree with this idea, but I'm just pointing out your error. As for what the state does to deserve tax money from an Internet transaction, they maintain the public road system that your purchase arrives through. Unless youre buying an mp3 from iTunes, maybe.
SonnyDog09
Sat, May 12, 2012 : 5:43 a.m.
"All so some cheapskates can avoid paying sales tax they are legally obligated to pay? At the expense of roads, schools, police and fire protection?" Please explain to me how the internet merchant from out of state benefits from sending money to some random state or other governmental unit for "roads, schools, police and fire protection?" Exactly how does Amazon benefit from sending money to Michigan or Ann Arbor? What does the state do to earn any money from an internet transaction?
M
Sat, May 12, 2012 : 2:43 a.m.
There's no way this will stand up to a lawsuit against states regulating interstate commerce. Thems federal grounds there.
Maxwell
Sat, May 12, 2012 : 12:47 p.m.
And the Governor is supporting federal legislation... http://www.enzi.senate.gov/uploads/marketplacebill.pdf
sh1
Sat, May 12, 2012 : 2:09 a.m.
I don't disagree with him on this, but can't help thinking that a Democratic governor proposing the same thing would be called out for raising taxes.
G-Man
Sat, May 12, 2012 : 12:43 p.m.
Do you mean "Democrat" governor?
SonnyDog09
Sat, May 12, 2012 : 1:15 a.m.
I am reposting this from the last discussion that we had concerning applying sales taxes to online purchases. What does the state or local government do to earn any portion of the cost of an internet purchase? It's not like they get *nothing* from the purchase. Consider: I pay tax on the property that I am in when I make the purchase. I pay tax on the electricity that I use to run the computer that I use to make the purchase. I pay tax on the internet service that I use to make the purchase. The delivery company pays property tax for their in state facilities. The delivery company pays gas tax on the fuel that is used to run the vehicle that makes the delivery. The delivery company pays a registration fee for the vehicles that they use to deliver the package. The delivery driver pays income tax on what he earns to deliver the package. The delivery company pays income tax on what they earn from delivering the package. Seems to me that the government makes out better on an internet purchase than they do on a purchase from a brick and mortar store.
Robert Granville
Sat, May 12, 2012 : 1:41 p.m.
Wow.. you really said it all. Thanks.
Peregrine
Sat, May 12, 2012 : 4:08 a.m.
Is this really an honest analysis? Have you seriously attempted to put numbers to any of this? How much additional tax is paid on your property when you make an internet purchase? $0.00. How much tax is paid on the electricity used to make the purchase? It's a very small fraction of a penny. How much incremental internet service tax do you pay to make the purchase (as opposed to writing comments on AnnArbor.com, for example, or using your spreadsheet to do actual analysis)? Somewhere between slim and none. And when you buy from a local shop, there was gas consumed to bring the goods to the shop and gas consumed for you to pick them up. The driver and delivery company once again pay income taxes. The delivery company once again pays property taxes. And yet you claim to have seriously concluded that government makes out better with the internet purchase.
SonnyDog09
Sat, May 12, 2012 : 1:14 a.m.
Given that Snyder was CEO of Gatweay, which started out as a "mail order" pc manufacturer, the irony here is pretty delicious. I bought more than a few peecees from Gateway back when they shipped decent products to you home.
ffej440
Sat, May 12, 2012 : midnight
Whats all this buy local? Does it matter whether you buy China made product from Big Box store or online ? What about the local jobs created by shipping online product ? Really, where is the "local" mom and pop store ? You folks need to try online shopping- You will never go back to wasting gas and time.
dotdash
Fri, May 11, 2012 : 11:37 p.m.
This is a good idea. Either it deters people and they go back to buying more locally, or it doesn't and the state gets the tax dollars. win/win. In fact, let's up the tax on online purchases to 10%. Maybe we can get some education dollars back.
thecompound
Sat, May 12, 2012 : 9:38 p.m.
Or three, they decide they don't need another shirt, pair of shoes, jewelry, or any other extra item and just save their money.
ffej440
Fri, May 11, 2012 : 11:21 p.m.
What about online retailers in Mich. that will lose sales to out-state purchasers ? What would you do with private online sales like E-bay? Who is going to track all these online sales to insure tax paid is returned ? Sounds like another waste of time and money.
John Q
Sun, May 13, 2012 : 7:55 p.m.
A company like Amazon can figure out how to sell a million items online but can't figure out how to collect sales taxes? That's a joke.
thecompound
Sat, May 12, 2012 : 2:02 a.m.
Someone will also have to track online returns to make sure the tax is refunded also.
SonnyDog09
Sat, May 12, 2012 : 1:10 a.m.
oops. I replied to the wrong post. " It would be easy for eBay and Amazon about to compute the tax and add it to the sale. " The problem is that local sales taxes are so complicated and convoluted that it is impossible for an online retailer to calculate what tax you should pay on an item. There are state, county and city sales taxes. They can vary based on the item that is sold. If government's simplified sales taxes, this might work, but don't hold your breath waiting for that to happen.
1bit
Sat, May 12, 2012 : 12:10 a.m.
That's why this issue needs to be handled at the federal level rather than state-by-state. It would be easy for eBay and Amazon about to compute the tax and add it to the sale. Local online merchants already charge sales tax to Michigan residents and changing the software to compute tax for other states is also no big deal.
heresmine
Fri, May 11, 2012 : 11:21 p.m.
Long time in coming. Funny that the state has gone after people that bought cigaretes on line to collect those taxes. Seems like they should have used the same tactics to track down online purchases. I've bought online a few times and it's always because the item isn't available locally.
SonnyDog09
Sat, May 12, 2012 : 1:09 a.m.
" It would be easy for eBay and Amazon about to compute the tax and add it to the sale. " The problem is that local sales taxes are so complicated and convoluted that it is impossible for an online retailer to calculate what tax you should pay on an item. There are state, county and city sales taxes. They can vary based on the item that is sold. If government's simplified sales taxes, this might work, but don't hold your breath waiting for that to happen.
ffej440
Fri, May 11, 2012 : 11:34 p.m.
Why spend the gas and time ? Since most everything is made in China does it really matter to "Shop local"? Online shopping makes local jobs in shipping/delivery. If you try it... you will love it. The reason this was not done sooner is that it can't be done. It would cost more to track, than you would collect.
Brad
Fri, May 11, 2012 : 10:25 p.m.
Shouldn't be a problem here since EVERYONE buys local, right?
towncryer
Fri, May 11, 2012 : 11:07 p.m.
Good one, lol.
smokeblwr
Fri, May 11, 2012 : 10:11 p.m.
Fine with me. I pay it on my state return anyway because I'm an Honest Citizen.
arborani
Sat, May 12, 2012 : 2:35 p.m.
Assuming you're not kidding, welcome to the Club.
thinker
Fri, May 11, 2012 : 9:43 p.m.
I knew this day was coming. It will have to be computed on the original bill. No one will pay voluntarily.
Linda Peck
Fri, May 11, 2012 : 9:40 p.m.
Where is that dislike button again?
Ron Granger
Fri, May 11, 2012 : 9:34 p.m.
Tax and spend Republican. He can give the extra income to his big business buddies.
arborani
Sat, May 12, 2012 : 2:34 p.m.
Well, *I* have.
Arborcomment
Fri, May 11, 2012 : 9:42 p.m.
And you've been paying that 6% on your tax returns all along right?