Response: Online sales cut into Michigan revenue

Christine Rook of the Lansing State Journal in Michigan just wrote “Online sales cut into Michigan revenue – Holiday shoppers avoid sales tax by buying online

After reading a few of the reader comments, we felt an important distingtion was being lost on the LSJ.com readers, so we commented:

TaxCloud wrote:

I think it may be appropriate to point out that the sales taxes due on Internet purchases are not a new taxes. Sales and use tax have been Michigan law since 1937!

Although taxes are unpopular, voters routinely approve *local sales taxes* to pay for schools, police, and other local services. It is unfair to require local businesses to collect and remit local sales taxes, while not requiring so-called “remote sellers” to do the same.

Historically remote sellers were mail order catalog merchants. In 1967 & 1992 the US Supreme Court agreed that remote sellers *should* collect and remit local sales taxes, but they also conceded that requiring remote sellers to keep track of 4,000+ local tax jurisdictions would be too difficult. With the success of the Internet over the last 25 years, it is time to revisit exactly how difficult it is for remote sellers to keep track of just over 10,000 jurisdictions.

Unfortunately, the posting rules were rather strict, so we couldn’t go into much more detail without posting a series of comments, but hopefully if any of LSJ.com readers have any questions they will find us.

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