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  1. #1
    OPM and Moderator Chuck Hamrick's Avatar
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    Gov. Snyder urges Congress to let Michigan collect sales tax on online purchases
    Add Michigan to the states looking for an affiliate tax nexus:

    Lansing— Gov. Rick Snyder wants Congress to level the playing field for businesses competing with online retail giants by enabling Michigan to collect its 6 percent sales tax on all Internet transactions.

    The Republican governor's first public statement on the complicated issue comes as state legislation remains stalled because some GOP House members want to duck election year tax votes.

    Instead of passing a state law that could be subjected to a costly court challenge, Snyder and House Speaker Jase Bolger want the deeply divided partisan Congress to authorize states to collect taxes on Internet sales.

    "If you leave it up to each of the individual states, you could end up with this patchwork of tax laws," said Ari Adler, spokesman for Bolger, R-Marshall.

    "That's the biggest hurdle on the Republican side, (is) this no new tax pledge," said Dan Marshall, president and chief operating officer of Marshall Music, whose seven stores compete with online retailers that don't charge sales tax. "That's really what I think has it tied up."

    Seventeen states have adopted laws to collect sales taxes on Internet purchases, though some retailers are challenging those laws on grounds only Congress can regulate interstate commerce.

    "At this point, we would prefer a federal solution," Snyder spokeswoman Sara Wurfel said Friday.

    Some Republican state House members believe if the state suddenly began collecting sales tax on Web purchases after a decade of tax-free online shopping, it could be construed as a tax increase, said Rep. Jud Gilbert, chair of the House Tax Policy Committee.

    "I think that's their rationale," said Gilbert, R-Algonac, who supports the state legislation. "This isn't a new tax."

    Gilbert would not name fellow Republicans who oppose the bill on grounds that it raises taxes.

    State law requires individuals to declare unpaid sales or use taxes on their income tax returns, but very few do it, said state Rep. Jim Ananich, D-Flint, one of the bill sponsors.

    "I don't think a tax you're supposed to pay right now and not paying is a new tax," Ananich said.

    Ananich said waiting for Congress to fix the problem "isn't exactly the best idea." He said he favors passing the bill to pressure Amazon.com to enter into an agreement with Michigan to collect and remit sales taxes, as the retailer has done with other states.

    Amazon supports the federal Marketplace Fairness Act, and one of its vice presidents, Paul Misener, testified before the U.S. House Judiciary Committee in November alongside Marshall, who was invited by the committee's ranking Democratic member, U.S. Rep. John Conyers of Detroit.

    Snyder quietly made his first public endorsement of the federal legislation in a letter sent Monday to U.S. Senate Majority Leader Harry Reid of Nevada and Minority Leader Mitch McConnell of Kentucky. Michigan retailers announced the governor's support for the federal legislation on Friday, while calling for a state law to level the playing field for small retail businesses struggling to compete with Internet behemoths like Amazon.com and Overstock.com.

    "Government should not be in the business of giving favored treatment of one retail sector over another sector," said James Hallan, president and CEO of the Michigan Retailers Association. "You just have this protected class that's flying under the radar and it's just not right."

    Since the advent of online shopping a decade ago, states have governed by a pre-Internet 1992 U.S. Supreme Court ruling that a company must have nexus, or physical presence, inside a state for it to be required to collect and remit sales tax.

    That has left a mishmash of sales tax collections for online purchases. Retailers with an in-state store, such as Wal-Mart or Target, collect sales taxes for online transactions with Michigan residents while Amazon.com does not, Hallan said.

    Exploding growth in online shopping is leaving a bigger hole in coffers of state government each year. The state Treasury Department estimates the state stands to lose $421 million this fiscal year in sales tax going uncollected for online and mail order purchases. That number is projected to grow to $451 million in the 2013 fiscal year.

    "As we continue to work to improve the quality and efficiency of services throughout the state, it is crucial that the state has the tools to fairly collect the revenue that it is owed," Snyder wrote in the letter to McConnell and Reid.

    Marshall, whose family's business has been selling musical instruments for 64 years, said he grows concerned about inaction from the state and federal governments on the issue.

    Every day, sales associates in Marshall's seven stores — including three in Metro Detroit — help customers who scan the barcodes of their inventory and compare the price to tax-free Amazon.com, Marshall said.

    "Every day, every hour somewhere we lose a sale as a result" of its 6 percent competitive disadvantage, he said.

    "This is life and death for Main Street retailers like Marshall Music and I'm not being dramatic," Marshall said.



    From The Detroit News: Snyder urges Congress to let Michigan collect sales tax on online purchases | The Detroit News | detroitnews.com

  2. #2
    OPM and Moderator Chuck Hamrick's Avatar
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    This I have trouble believing, seems like grandstanding to me:
    Every day, sales associates in Marshall's seven stores — including three in Metro Detroit — help customers who scan the barcodes of their inventory and compare the price to tax-free Amazon.com, Marshall said.

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