MI Sales Tax

As we all know, the MI return asks taxpayers to voluntarily report any unpaid sales tax on the tax return each year.  Many states haven’t been able to count on the monies generated by the sales tax generated by the purchases generated by the residents on purchases made on line.

However, a good bit of e-commerce is no longer subject to tax according to the Supreme Court. A recent decision stated that unless out-of-state sellers have a physical presence in the buyer’s home state, purchases are not taxable.  Collection is required only for retailers with a physical presence, a store, factory, warehouse etc.  Some states are now enacting laws in an effort to get around this, for example requiring tax collection if weblinks are within the state. Expect more litigation on this issue.

For now, it seems reasonable to assume that any store with a physical presence, should have purchases reported on your tax return if sales tax wasn’t paid on the purchase.

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