Michigan lawmakers look for ways of closing the online sales tax loophole

Apr 30, 2013

Michigan lawmakers are looking at how to get online retailers to collect state sales taxes.

Currently, shoppers are supposed to report any sales taxes they owe on online purchases, and pay them with their income tax.

But most people don’t.

State Representative Eileen Kowall’s bill would put the responsibility on the online retailer.   She’s quick to say this is not a tax increase, just making sure that the taxes that are owed are being paid.

Kowall says the current system puts Michigan’s ‘bricks and mortar’ retailers at an unfair disadvantage.

“They can’t get rid of that embedded 6% disadvantage that they have.”

There’s a similar bill stalled in Congress.

The Michigan online sales tax bill goes before the state House Tax Policy committee Wednesday morning.

In addition to helping ‘bricks and mortar’ retailers, the bill could generate tens of millions of dollars in new state sales tax revenue.