On page 2 of your MI tax return is a generally overlooked line:
USE TAX. USE TAX ON INTERNET, MAIL ORDER OR OTHER OUT-OF-STATE PURCHASES FROM WORKSHEET 1, LINE 3.
The State of MI expects you to report any of those specific purchases where you did NOT pay MI sales tax and voluntarily pay the sales tax on your state return each year. If you’d rather not keep receipts throughout the year, yet you know you tend to make these types of purchases, you also have the option of using the chart provided (which is based on your income level) to determine the amount of additional tax owed.
At some point in time, MI will find a way to independently check this reporting. In the meantime, it is expecting taxpayers to be honest and report any tax due.
I’m attaching the recent press release from the MI department of Treasury on the topic.
DEPARTMENT OF TREASURY
R. KEVIN CLINTON
March 19, 2014
FOR IMMEDIATE RELEASE Contact: Terry Stanton
http://www.michigan.gov/treasury (517) 335-2167
Internet Shoppers Reminded to Report Use Tax on MI 1040 Tax Return
Income Tax Returns Due on April 15th
As you prepare to file your 2013 Michigan income tax return, the Department of Treasury is reminding you to report any Use Tax that may be due on purchases made outside of Michigan, either by telephone, catalog, or over the internet, in 2013.
Michigan’s Use Tax applies to transactions on which a retailer does not collect sales tax. Use Tax must be paid on purchases made from out-of-state sellers, including those made while traveling in foreign countries, on the total price of the items (including shipping and handling charges). When an out-of-state vendor does not collect sales tax on a purchase, under Michigan law, the buyer is responsible for reporting and paying the Use Tax.
Michigan makes it easy for taxpayers to pay any Use Tax obligation when filing their annual income tax return. Please see line 23 of the Form MI-1040 Michigan Individual Income Tax Return and the instruction booklet for more on how to report your tax.
Additional information can be found at http://www.michigan.gov/taxes by clicking on the Sales and Use Tax tab.