Still Need to Keep On-line Purchase Receipts in MI

Starting yesterday, most online retailers will now be collecting MI sales tax on purchases. So MI taxpayers can now honestly answer that they do NOT owe additional sales/use tax when they file their tax returns.

HOWEVER, unfortunately there are still some who do not. Michigan is urging residents to continue to save receipts for online purchases to ensure that MI sales tax was collected. For those where it was not, be prepared to pay the sales/use tax on the tax return.

In addition, for 2015, those with online purchases will likely have sales tax owed since online retailers did not start the collection process until Oct 1.

Press Release from the State of MI:
Cyber shoppers reminded to keep receipts

Many on-line retailers to begin collecting sales tax October 1st

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Shoppers who make purchases on-line, by telephone or catalog on or after October 1, 2015 are being reminded to keep their receipts to determine whether sales tax was charged on the transaction.

Under new provisions that take effect tomorrow, many so-called remote sellers will begin collecting Michigan’s 6-percent sales tax on purchases made by Michigan residents. Residents making “remote” purchases on or after October 1 will owe use tax if the sales tax wasn’t collected by the “remote” seller.

“It is important for individuals to understand that this is not a new tax; Michigan’s tax on these types of sales has been on the books for more than 80 years,” said State Treasurer Nick Khouri. “The new provisions simply mean that various on-line and remote sellers, that will now be deemed to have some presence in the state, will begin collecting tax on the sales they make into Michigan.”

Due to provisions within the Revenue Act prohibiting disclosure of taxpayer information, Treasury cannot disclose which firms will be required to collect and remit sales tax.

Since the 1930’s, Michigan’s Use Tax has required individuals to pay tax on goods they buy through mail-order, television shopping networks, or on-line purchases. It is easy for taxpayers to pay any Use Tax obligation they may have when filing their Michigan individual income tax return each spring. The MI-1040 instruction booklet contains instructions on how to calculate one’s liability. Maintaining receipts from remote purchases can ensure taxpayers know which transactions were subject to sales tax and, likewise, what transactions the use tax would apply to.

Michigan’s Use Tax is calculated at the rate of 6 percent. Purchases subject to the Use Tax include appliances, books, clothing, computers, DVDs/CDs, electronics, furniture, pre-written computer software, and tobacco products.

For more information, visit http://www.michigan.gov/taxes and click on the Sales and Use Tax tab.

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