Michigan looking to expand sales taxes online

posted at 6:46 pm on May 19, 2012 by Jazz Shaw

Something’s cooking in Motor City and it’s not an engine with a blown radiator. The Governor of Michigan is looking to put some additional coin in his state’s coffers while promoting local business activity. And how does he plan to accomplish this feat? He wrote a letter to the Senate.

Gov. Rick Snyder is urging the U.S. Senate to pass legislation that would allow Michigan to extend its 6 percent sales taxes to purchases from out-of-state Internet retailers.

Snyder sent a letter to senators this week endorsing the Marketplace Fairness Act, which would enable states to collect sales taxes from online retailers like Amazon and Overstock.com.

“By enabling remote sellers to ignore the collection of sales and use taxes, it provides them an unfair competitive advantage and threatens the viability of retailers throughout our communities, many of which are locally owned small businesses that reflect the unique character and culture of the Great Lakes State,” Snyder wrote in a letter sent Monday — and obtained Friday by The Detroit News — to Senate Majority Leader Harry Reid of Nevada and Minority Leader Mitch McConnell of Kentucky.

We’ve talked about the Marketplace Fairness Act here before, with the vast majority of you disapproving. This is the first time I’ve seen it crop up in Michigan, though. So how much money are we talking about here? The Michigan treasury department estimates, “the state will lose $872 million in uncollected sales taxes in the 2012 and 2013 fiscal years” because of online commerce sales going untaxed.

Also of note is the fact that Rick Snyder is no tax and spend liberal. He’s a Republican who campaigned on eliminating deficits and has been working to remove or consolidate taxes on businesses. He’s even been mentioned as a possible VP pick this year, though I’d say he’s pretty far down on the list at this point.

I’m sure there’s some politics at work here as well, but the general spin seems to be that Snyder wants to support local small businesses (as well as they jobs they provide) by making online sellers compete under the same tax burden. Will it work? Republicans suggesting that anyone pay more taxes don’t tend to fare very well. Snyder may be no exception.


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Hey moron: if people want these businesses to succeed, they will patronize them. All you do by increasing the cost of other goods is stop some people from being to afford them. You’d think a Republican would at least be familiar with these concepts.

Living4Him5534 on May 19, 2012 at 6:49 PM

Fine with me, anything to keep any more of you from moving down here. ; )

Bmore on May 19, 2012 at 6:49 PM

Yeah, the protectionist tax scheme worked so well for Herbert Hoover.

fitzfong on May 19, 2012 at 6:52 PM

Keep voting democrat!

tom daschle concerned on May 19, 2012 at 6:55 PM

It’s a tough call. Brick and mortar businesses here have to charge the 6% sales tax on non food items. Snyder has been shifting the tax burden from businesses to individuals, which has made a lot of people mad.

Retirees have had a free ride with their state and private pensions being exempt from the state income tax. Not now if you are under 67 years of age.

I like Snyders’s approach even though I will get hit by the pension tax. He has taken a long range view that the more business he can attract to the state, the better off everyone will be in the long run.

It goes against the grain of those who want an instant fix to everything.

He may even turn Detroit around. If he pulls that off, he could run for God.

later on May 19, 2012 at 6:55 PM

Sigh, haven’t they learned from other states that this just doesn’t work and usually results in FEWER tax receipts?’

Government needs to quit making retail businesses their tax collectors.

Common Sense on May 19, 2012 at 6:57 PM

Funny he should just mention the ‘mom and pop’ stores. No mention of the ‘big box’ stores that drive ‘mom and pop’ out of business.

The Michigan treasury department estimates, “the state will lose $872 million in uncollected sales taxes in the 2012 and 2013 fiscal years” because of online commerce sales going untaxed.

Just how did they come up with that number?

Is he willing to PAY those out-of-state vendors a fee for collecting his state’s tax?

GarandFan on May 19, 2012 at 6:58 PM

Problem is a lot of things I purchase (like software and electronic components from radio shack) are no longer sold locally in stores. You have no choice but to go online to get them. I do not mind paying the taxes (if I have too) but do not do this in the name of helping local businesses.

If my Governor wants more money than stop the new bridge project to Canada and foreclose on the city of Detroit already and root out the crooks stealing from the tax payers there.

mechkiller_k on May 19, 2012 at 6:58 PM

Well, we already have a use tax which, frankly, I paid.

What do we do, though? I think we know that governments need to raise money (even if we think they spend too much). We prefer sales taxes to income taxes – so state’s do need to collect them.

David Shane on May 19, 2012 at 6:59 PM

…he wasn’t called the NERD for nothing!
He’s like Romney…a good liberal leaning business man, who is slowly turning the state around…so that JugEars can take the credit.

KOOLAID2 on May 19, 2012 at 6:59 PM

Fine with me, anything to keep any more of you from moving down here. ; )

Bmore on May 19, 2012 at 6:49 PM

…Hey!…I favor that resentment!…I think…

KOOLAID2 on May 19, 2012 at 7:06 PM

Hmmm…maybe instead of worrying about increasing tax income he should worry about decreasing the costs of doing business in his state.

Make the local market more competitive by decreasing their non-business overhead.

Solve the problem instead of exacerbating it.

ProfShadow on May 19, 2012 at 7:07 PM

What do we do, though? I think we know that governments need to raise money (even if we think they spend too much). We prefer sales taxes to income taxes – so state’s do need to collect them.

David Shane on May 19, 2012 at 6:59 PM

And states need to have a uniform policy in place for collecting them. The problem is that states never envisioned technology taking the turn that it has. That’s not a problem in states like mine that don’t have their asses in a sling, but it is a problem in places like Michigan with more severe budget shortfalls.

gryphon202 on May 19, 2012 at 7:11 PM

OT- Congratulations Chelsea for winning the UEFA league championship.
You all are the true pride of London

Uppereastside on May 19, 2012 at 7:13 PM

KOOLAID2 on May 19, 2012 at 7:06 PM

Nah, one more down this way can’t hurt. I like you, so you’re always welcomed. Besides I forgot my sarc tag. Is that a little confusing now? ; )

Bmore on May 19, 2012 at 7:13 PM

My solution: All sales, internet or otherwise, which are made by Michigan companies would require them to collect the appropriate Michigan sales tax associated with the head office of the place of business on every transaction.

When I go to another state, they don’t ask to see my drivers license before determining to charge me tax.

That would be fair — the company making the sale must charge the tax, and they already have the software ready to do it. There’s no changes in accounting methods needed, no onerous bookkeeping…

There would only be one small problem — a company located in Michigan would be at a disadvantage to competitors in the other 56 states.

But if Michigan can convince the other states to do this, no federal law is needed.

But then Michigan would still be at a disadvantage — relative to those states with lower sales tax rates.

I guess everyone would have to examine their Laffer Curves carefully…

unclesmrgol on May 19, 2012 at 7:14 PM

Scott Walker knows how to fix their problem.

bs4948800 on May 19, 2012 at 7:17 PM

…he wasn’t called the NERD for nothing!
He’s like Romney…a good liberal leaning business man, who is slowly turning the state around…so that JugEars can take the credit.
KOOLAID2 on May 19, 2012 at 6:59 PM

Lol. He exempts the millionaires from paying their fair share in taxes but over taxes the middle and struggling class to make up for the short fall.
No wonder this country is slowly turning into a 3rd world country where the rich continues getting richer and thr poor poorer.

Uppereastside on May 19, 2012 at 7:20 PM

The Michigan treasury department estimates, “the state will lose $872 million in uncollected sales taxes in the 2012 and 2013 fiscal years” because of online commerce sales going untaxed.

Um, not taxing something is not a “loss.”

mankai on May 19, 2012 at 7:27 PM

Show me 10 consecutive years of government spending discipline and efficiency and I’ll consider an online slaes tax.

rickyricardo on May 19, 2012 at 7:32 PM

‘Fair share’ has no meaning whatsoever and those who use it are disingenuous.

tom daschle concerned on May 19, 2012 at 7:32 PM

1. The state isn’t “losing” anything. It just isn’t getting to TAKE $872 million out of the pockets of its citizens.

2. Broken window fallacy. That $872 million *IS* likely spent at local business. By leaving that money in the pockets of people in Michigan, that gives them $872 million dollars to spend in other businesses in the state. If the state taxes that money from them, local business AND the people will suffer.

It is idiotic logic that relies on presenting things in an emotionally appealing way but which does not add up when you do the economic math.

Local business CAN compete with Amazon … and win! If I could get on line and place an order with a local store and if it showed up at my door, they can have my business. I don’t shop at Amazon to avoid taxes, I shop at Amazon because they have EVERYTHING and it is convenient.

If the state taxes my Amazon transactions, I am STILL going to stop at Amazon and have less money to spend on other things in my own state.

crosspatch on May 19, 2012 at 7:33 PM

In other words, taxing Amazon transactions will only remove nearly a billion dollars worth of revenue from the pockets of the residents and won’t result in a single additional sale to local business. I have a book store 5 blocks away. I don’t use it, and that isn’t because of sales tax. If I could go online, order the book and have them BRING it to me, I would seriously consider using their store.

crosspatch on May 19, 2012 at 7:35 PM

Uppereastside on May 19, 2012 at 7:20 PM

…can’t read?…

liberal leaning business man…

…where does he exempt the rich…by the way?
I don’t call you Upyerassideways just for kicks…you know…

KOOLAID2 on May 19, 2012 at 7:37 PM

Amazon might be able to do an end run around things like this by working out an affiliate program with local independent bookstores. I buy the book on Amazon, the local store brings it to my house and gets the sale with a revenue share to Amazon. Amazon didn’t have to ship a book and the local store gets some revenue they might not otherwise have gotten.

crosspatch on May 19, 2012 at 7:38 PM

Didn’t they try this in California…?

… Oh, wait!

Seven Percent Solution on May 19, 2012 at 7:40 PM

Scott Walker knows how to fix their problem.

bs4948800 on May 19, 2012 at 7:17 PM

…they need 56 more Governor’s…just like him!
(56 more…and JugEars WOULD be turning the economy around!)

KOOLAID2 on May 19, 2012 at 7:41 PM

I know that it’s the total culmination of multiple purchases by everyone who buys online that eventually adds up to a big loss that concerns the politicians — but Sales Tax has no impact on my decision making process when deciding to buy something online or not. None. Zero. Zip. Nada.

I won’t ever buy big ticket items the likes of big-screen TVs or home entertainment systems online only to take the risk of having the individual item’s sensitive electronics jolted, bumped, dropped, slammed, banged, thrown and/or otherwise manhandled and transported great distances in airplane cargo holds and/or the back of trucks on bumpy roads for great distances by tired angry people who hate their jobs, anyways. Plus, returns and exchanges online are a major PITA.

But then again — I’m not ‘poor’ either. Neither am I a 1%’er — and I’m totally okay with that.

The most expensive single item I ever bought online and had shipped to my residence was a wristwatch. The sales tax (or in the case of California where I reside — the Use Tax) would have been about $80. Big deal. I saved $1,000+ on the wristwatch buying it online instead of at the least expensive retail store I could find it in near where I live.

Once again, the people hardest hit by these mealymouthed politicians will be the low-middle class and the poor. But then again, they can use those taxes to keep the poor suckling on the government teat forever — or in my case to pay off billions upon billions of dollars worth of bonds to build and operate a bottomless money pit bullet train to nowhere that practically no one will ever use on a regular basis.

FlatFoot on May 19, 2012 at 7:47 PM

Fact 1: You cannot give to someone that which they never had.

Fact 2: You cannot take from someone that which they never possessed.

Understanding those two indisputable facts, let us examine how the Governer looks at things.

Since you never had that revenue in the first place, you cannot lose it. And since you may find that placing a tax burdon on those sales may cuase you to lose other streams of income because those online businesses will simply avoid your state and the affilliated businesses it provides a revenue stream to within the state will then be cut off (an actual loss) this may in fact be a quick way to shoot yourself in the foot.

But go ahead, forget principle and take the easy road that democrats take, don’t put yourslef in the crosshairs like Scott Walker and improve things for real and make the takers mad at you.

RINO is as RINO does. (appeas the legacy media and liberal special interests.)

jaydee_007 on May 19, 2012 at 7:49 PM

Jeez. Another post disappears into the unattended black-hole of HotGas moderation despite it being completely void of profanity or proper names of genitalia.

FlatFoot on May 19, 2012 at 7:50 PM

Probably because it’s a comment on a Jazz Shaw post.

FlatFoot on May 19, 2012 at 7:51 PM

Amazon might be able to do an end run around things like this by working out an affiliate program with local independent bookstores. I buy the book on Amazon, the local store brings it to my house and gets the sale with a revenue share to Amazon. Amazon didn’t have to ship a book and the local store gets some revenue they might not otherwise have gotten.

If that were a viable business model, Amazon would have done it a long time ago.

Amazon works affiliate programs where it’s viable. When government forces Amazon to change its buisness model, well there’s a name for that, it’s Faschism.

jaydee_007 on May 19, 2012 at 7:52 PM

I support an internet tax(to level the ground between brick and mortar and the internet) that goes to rebating people’s purchase of broadband internet(to support the internet). Moore’s law is going to be ending soon(10 or so years) and the New Moore’s law will depend on the cloud… so we need to reduce the friction between us and the clouds as much as possible.

ninjapirate on May 19, 2012 at 7:52 PM

Correction:

Fact 1: You cannot give to someone that which they already possess.

Fact 2: You cannot take from someone that which they never possessed

jaydee_007 on May 19, 2012 at 7:55 PM

In Idaho, they expect you to pay your Internet state sales tax on your tax returns…lol…wonder how many ppl actually do that?

sage0925 on May 19, 2012 at 7:57 PM

If states have a sales tax, they should collect it from Internet sales to citizens in their state.

The idea that states shouldn’t have a sales tax, or that their sales taxes should be lower, is entirely separate. But the current situation amounts to a subsidy by the states to internet retailers against their retail competitors.

I don’t know if brick-and-mortar outlets would be doing markedly better against Amazon etc if they weren’t at the disadvantage of collecting, but I do know that 9% is a hell of a lot, and that’s the median American sales tax rate. If we’re going to have a new economy, it should be based on reality, not whichever business circumvents the imagination of politicians.

Furthermore, the internet shields citizens from the result of voting for politicians that support higher (or any) sales taxes. The buildings get boarded up around them while people say “oh well, I’ll just buy what I need online.” You can’t keep robbing Peter to pay Paul. Either everyone should pay at a given rate, or no one should.

HitNRun on May 19, 2012 at 8:00 PM

When I go to another state, they don’t ask to see my drivers license before determining to charge me tax.

unclesmrgol on May 19, 2012 at 7:14 PM

Well, here in Washington, if you take the initiative and show the Cashier your out of state license, regardless of being asked, you will not be charged the State Sales Tax on your purchase.

jaydee_007 on May 19, 2012 at 8:02 PM

You can’t keep robbing Peter to pay Paul. Either everyone should pay at a given rate, or no one should.

HitNRun on May 19, 2012 at 8:00 PM

(I mean within a given state or jurisdiction, of course.)

HitNRun on May 19, 2012 at 8:03 PM

I see Amazon scouting warehouse space in Singapore.

Dr Evil on May 19, 2012 at 8:06 PM

I support an internet tax(to level the ground between brick and mortar and the internet) that goes to rebating people’s purchase of broadband internet(to support the internet).

I don’t believe it does “level the playing field” at all. I do not shop at Amazon to avoid sales tax and I don’t think anyone else does, either. Now if people used Amazon for the sole reason of avoiding sales tax, then yeah, maybe, but I believe the number of those people is somewhere close to zero. So adding such a tax will have no impact at all on brick and mortar sales. It will simply be a revenue windfall for the state.

If states have a sales tax, they should collect it from Internet sales to citizens in their state.

In most states, if you buy something from Amazon you are SUPPOSED to report it and pay tax on it. I know in California the law states that if you buy things from out of state, either by mail order or over the Internet, you are supposed to report the transaction and pay California tax. Many other states have the same regulation. Few people actually do this.

Amazon works affiliate programs where it’s viable.

Not THAT sort of affiliate program. The traditional Amazon affiliate program is where you put an Amazon link on your website and people click through to purchase from Amazon and the affiliate gets a couple of pennies. I am talking about something different. I am talking about where Amazon actually sells the inventory of local independent bookstores from their website. It basically gives Amazon thousands of additional distribution centers at no cost.

If that were a viable business model, Amazon would have done it a long time ago.

Oh, right, I keep forgetting that every single good idea has already been thought of long ago and no new business paradigms will ever be invented or tried by anyone. How could I forget.

crosspatch on May 19, 2012 at 8:13 PM

I just got my notice from Amazon here in TN about what taxes I might owe on stuff bought in 2011.

The Tea Party here is more interested in bible thumping nonsense than in things like this that really matter.

Moesart on May 19, 2012 at 8:19 PM

I decide I want to buy something. I go on the Internet. I find it at Amazon, buy it, it shows up at my door in a day or two.

Alternative

I decide I want to buy something. I forget. Three days later I remember. Now I have to put on pants, take a shower, brush my teeth / . I go get in the car, drive downtown, have to find (and pay for) a place to park or park at the mall, find the darned thing (if they have it) or maybe have them order it for me or maybe have to go to a different store. Buy the darned thing (with sales tax but the sales tax is the least of my inconvenience) and bring it home. So I not only have spent the sales tax, but I have wasted a good hour or two of my time which I probably value more than the sales tax and I didn’t get it any sooner. I could have just clicked the web page and it would have shown up at my door, flying across the country during that period when I forgot about it.

crosspatch on May 19, 2012 at 8:21 PM

Snyder doesn’t read the news, I guess. Two states’ laws that did this very same thing were recently slapped down. Unless Congress gets on the sales tax bandwagon, this seems to be a moot point.

n0doz on May 19, 2012 at 8:21 PM

And I should have added: Congress has repeatedly taken a pass on this.

n0doz on May 19, 2012 at 8:22 PM

The Tea Party here is more interested in bible thumping nonsense than in things like this that really matter.

Moesart on May 19, 2012 at 8:19 PM

I would say that is more the “true conservatives” doing that than it is the “Tea Party” where I live. The tea party never was about conservative social issues, it was about liberty and taking our government back from an elite ruling class.

crosspatch on May 19, 2012 at 8:23 PM

I live in the totally awesome state of denial Michigan, and I can state with utter clarity & conviction that I think my state is going down the tubes.

Ugly on May 19, 2012 at 8:30 PM

He may even turn Detroit around. If he pulls that off, he could run for God.

later on May 19, 2012 at 6:55 PM

God already gave up on Detroit…the problem with Detroit is the people who live there (not including yourself if that’s where you live), and as long as they live there Detroit will continue to deteriorate.

jan3 on May 19, 2012 at 8:45 PM

I live in Maryland three States within 10 miles.

I have read articles of MD Cops pulling cars over to collect taxes on items bought out of State. Especially cigarettes and alcohol.

Does not seem like much of a free country when Politicians seem to think it OK to tell us where we can and can not buy something. Trying to force an out of state company to collect taxes for them for free. What about in state companies that would go out of business trying to collect taxes for thousands of different taxes nationwide. That is my main problem with this. It forces small businesses out of business but of course that is actually the point.

Steveangell on May 19, 2012 at 8:53 PM

There is NO reason that on line retailers should have a GOVERNMENT sponsored 6% (or higher) advantage over local retailers…especially when local retailers support local jobs, local charities and patronize other local businesses…and are used as showrooms by the on line guys1
By ALL means…let’s have a level playing field and if the online guys dominate…so be it. But a 6% advantage is MORE than the after tax earnings of most retailers.
Now of course this is a money grab due to the dire straits of most state economies…What REALLY should happen is that Michigan should be able to tax all retailers…but reduce the sales tax commensurate with LEVEL revenues. THAT would be fair and conservative.

camaraderie on May 19, 2012 at 8:56 PM

I don’t think Michigan needs any new federal laws to go ahead with its plan.

South Carolina collects a “use tax” on all purchases from Amazon. I got an email from Amazon telling me my total purchases from 2011 and that I needed to report it, which I did (on the use tax line on the SC tax return.)

http://www.sctax.org/Tax+Information/Sales+and+Use+Tax/default.htm

Pythagoras on May 19, 2012 at 9:08 PM

Gov. Engler was the last Michigan gov. to try this I believe. It didn’t bode well for him, not for elections, but just having the discussion fried his political capital.

I for one would stop buying more expensive things online. That means because I can’t get the stuff locally I’ll do without some things in the future. Added taxes aren’t going to help anyone. Period.

If Snyder wants to help Michigan he’ll cut costs and shave down the exorbitant property taxes here. It’s killing home owners. Union graft is killing competitiveness with out of state and out of country businesses, and business taxes are driving business out of state or into closing.

What part of this do people not understand? CUT SPENDING, REDUCE TAXING.

Wolfmoon on May 19, 2012 at 9:12 PM

Bmore
I thought you were a good guy, what’s with the Yankee hate? ??????/////////

angrymike on May 19, 2012 at 9:20 PM

“By enabling remote sellers to ignore the collection of sales and use taxes, it provides them an unfair competitive advantage and threatens the viability of retailers throughout our communities, many of which are locally owned small businesses that reflect the unique character and culture of the Great Lakes State,”

But fails to note that the remote sellers have the unfair disadvantage of individual shipping which tends to swamp out sales tax benefits. By forcing on-line retailers to collect sales taxes in all 50 states with multiple localities and individualized tax laws regarding what is taxable and where, you will drive the prices of on-line products up, reduce demand with the very real possibility that sales are simply lost, not transferred locally. Again, remote merchants have shipping costs as the leveling agent to local stores.

AZfederalist on May 19, 2012 at 9:25 PM

… If he pulls that off, he could run for God.

later on May 19, 2012 at 6:55 PM

I don’t think that The One (sometimes called on Hot Air by commenters, Dear Leader) would tolerate that sort of competition.

Kevin K. on May 19, 2012 at 9:30 PM

I have to ask…$874 million over 2 years is 6% of how much?

$14.4 Billion if I did the math right…Does anyone really believe the citizens of Michigan spend that kind of money online? Anyone??

JIMV on May 19, 2012 at 9:35 PM

There is NO reason that on line retailers should have a GOVERNMENT sponsored 6% (or higher) advantage over local retailers…especially when local retailers support local jobs, local charities and patronize other local businesses…and are used as showrooms by the on line guys1
By ALL means…let’s have a level playing field and if the online guys dominate…so be it. But a 6% advantage is MORE than the after tax earnings of most retailers.
camaraderie on May 19, 2012 at 8:56 PM

… and those local retailers have a 10% advantage (on average) over internet sales because they don’t charge you shipping and handling when you purchase from them.

Adding sales tax to shipping and handling charges associated with internet sales is not leveling the playing field, it is tilting the field.

… and calling it a “use tax” is just a sneaky way for the states to skirt the constitutional prohibition that only allows the federal government to tax interstate trade. If one purchase an item by internet and stores that item to be given to a relative in a state different from both the retailer state and the buyer’s state of residence, does that mean that there is no need to pay the use tax?

AZfederalist on May 19, 2012 at 9:44 PM

There is NO reason that on line retailers should have a GOVERNMENT sponsored 6% (or higher) advantage over local retailers…
camaraderie on May 19, 2012 at 8:56 PM

They do not have any such advantage.

Deleware and many other states charge no Sales Tax. States have the right to charge Sales Tax but it is their choice.

What we have here is States trying to have it both ways. They want to tax but not lose sales because of the taxing. Sorry but the constitution does not allow that. Michigan could eliminate that Sales Tax and then no advantage. Michigan is to blame not a retailer in Delaware or another State.

To sum it up.

Michigan is responsible for any advantage Amazon has by making it so expensive for local businesses to operate. Not just Sales Tax either.

Steveangell on May 19, 2012 at 10:04 PM

What do we do, though?

David Shane on May 19, 2012 at 6:59 PM

Why not just threaten to fire all the policemen, firemen, and school teachers.

I hear that works well./

pain train on May 19, 2012 at 10:07 PM

I have to ask…$874 million over 2 years is 6% of how much?

$14.4 Billion if I did the math right…Does anyone really believe the citizens of Michigan spend that kind of money online? Anyone??

JIMV on May 19, 2012 at 9:35 PM

If I did my math right, that works out to an average of $720/person/year in online sales in MI (based on a population of ~10M).

Sounds possible.

pain train on May 19, 2012 at 10:16 PM

If I did my math right, that works out to an average of $720/person/year in online sales in MI (based on a population of ~10M).

Sounds possible.

pain train on May 19, 2012 at 10:16 PM

I agree even probable.

However the problem is Michigan chooses to charge a 6% Sales Tax disadvantaging their own small business’. Michigan then tries to shift blame to other business’ in other States.

Sorry not buying it. Eliminate the Tax you eliminate any advantage many states do not charge Sales Tax already. It works for them.

Steveangell on May 19, 2012 at 10:34 PM

I have to ask…$874 million over 2 years is 6% of how much?

$14.4 Billion if I did the math right…Does anyone really believe the citizens of Michigan spend that kind of money online? Anyone??

JIMV on May 19, 2012 at 9:35 PM

If I did my math right, that works out to an average of $720/person/year in online sales in MI (based on a population of ~10M).

Sounds possible.

pain train on May 19, 2012 at 10:16 PM

Remember that’s per man, woman and child in Michigan. So, for an average family of four that would work out to $2880 per year in on-line orders per family. Median income in Michigan is $45,354 per ERS statistics. That would be about 6% of household income going to on-line purchases. Not completely unreasonable.

But then, that sales tax “loss” comes out to only $43.20 per person or $172.80 per family. That’s less than $3.60 per month per person or $14 per month per family that the state is getting exercised about. Also, that’s not a lot for local retailers to get exercised about either if the total amount of online sales is only 6% of peoples’ income.

AZfederalist on May 19, 2012 at 10:45 PM

Keep voting vomiting democrat!

tom daschle concerned on May 19, 2012 at 6:55 PM

…that sounded better to me…is that ok?

KOOLAID2 on May 19, 2012 at 10:46 PM

AZfederalist on May 19, 2012 at 9:25 PM
-
AZfederalist on May 19, 2012 at 9:44 PM
-
You’re a thinker.
-
Michigan you may need to change your slogan -
“Wherever in the world you compete, Michigan can give you the Upper Hand.”

diogenes on May 19, 2012 at 10:50 PM

Bmore
I thought you were a good guy, what’s with the Yankee hate? ??????/////////

angrymike on May 19, 2012 at 9:20 PM

…for gosh sakes angrymike…look what our two states have given to the nation in regards to the House and the Senate!…except for a few other states…we should be hated!

KOOLAID2 on May 19, 2012 at 10:52 PM

States want to pass legislation to tax internet sales? Easy, reduce the sales tax on the brick and mortar folks at the same time.

If this is about “leveling”, then, level it. Otherwise, they’re just growing the government and that’s the last thing we need. Seems like Republicans should be getting the hang of it, by now.

TitularHead on May 19, 2012 at 11:26 PM

Example:

I went to the local PetSmart to get a new cat litter box last Monday night. Darn thing had a crack in it that I had not noticed in the store. I didn’t want to hassle with the return and replace before this weekend, so I went online to see what I could buy.

I looked at the local Meijer store (like a walmart, regional all purpose store headquartered in Grand Rapids, MI) online. I found a kitty box design I liked but the price shocked me. I searched for that same brand name and model number at Amazon and it was about 40% cheaper.

Since I am a prime member of amazon, I get 2 day shipping free, and no sales tax.

No brainer. 2 days later, I had the new kitty box and my sister even returned the other box at the store for me. She checked the in store price and I still saved about $20 bucks.

So it is not just the sales tax “savings”, but the sheer convenience time wise and being hassle free. AND if the local stores can’t compete on price, screw them.

So even if I had to pay a sales tax immediately with my amazon purchase, I still saved money with this option. I am supposed to report my purchases and pay the taxes on my state income tax return, but until they pay me to track everything, screw them too.

karenhasfreedom on May 19, 2012 at 11:27 PM

Living in Michigan, I can tell you that the “don’t give a sh*t” mentality of the auto industry has permeated retail quite thoroughly. I don’t buy online to avoid sales tax; I buy on line because I can seldom find what I want at a reasonable price in the brick and mortar stores.

This is just more protectionism – trying to disable online retail through a circuitous route and force people to settle for things they don’t really want at unfair prices, all the while driving all over creation looking for their items.

Here’s an idea Governor Synder et al; when retailers in Michigan start catering to their customers, you’ll start collecting those sales taxes. And not before.

Mr Galt on May 19, 2012 at 11:27 PM

Oh, and the governor is on the wrong side of the bridge issue. we have a perfectly good bridge in Detroit called the Ambassador bridge. It doesn’t have a limited access highway on the Canadian side, but it does on the US side. For some reason, rather than just build a limited access highway on the Canadian side, they want to build a NEW bridge further south for TWO BILLION DOLLARS!!!!!

Supposedly it won’t cost the Michigan tax payers to build the bridge, but of course the tolls are supposed to guarantee the bonds or financing or whatever. The dirty little secret is if the tolls don’t pay for the bridge financing, the Michigan taxpayers will be on the hook.

We don’t want the bridge, we thought we killed it but for some reason it has reared up again.

karenhasfreedom on May 19, 2012 at 11:34 PM

But for all of our bitching about our governor, he is still miles ahead of Jennifer Granholm, a progressive big government lib we suffered through 2 terms with.

Snyder has begun to fix things, and he is taking a softer approach than Walker, but he should be a bit bolder. Our legislature turned red in 2010, and 68% of the Senate is republican and we have just over 50 some percent in the House. He could have taken on the public unions a bit more, but maybe in the next 2 years.

One of the things he did do to shore up the deficit was to tax health plan premiums. I now pay $4 a month in a tax for Medicaid. That pisses me off since I pay my own premiums. This was a sneaky way to get some revenue to the state from employers, since I presume they are paying the same tax for their benefit packages.

karenhasfreedom on May 19, 2012 at 11:41 PM

Oh, and the governor is on the wrong side of the bridge issue. we have a perfectly good bridge in Detroit called the Ambassador bridge.
karenhasfreedom on May 19, 2012 at 11:34 PM

I used to pretty much think the same way, until I read an article by Bloomberg Business on the whole bridge fiasco. Turns out, that the primary campaign against the new bridge is being spearheaded by the Ambassador’s current owner – Matty Moroun.

About 1/3 of all commercial traffic between the U.S. and Canada goes across that bridge, and Moroun (who bought it in 1977 for $30 million) collects about $60 million annually in tolls. He doesn’t want the new bridge – for fairly obvious reasons. Oh, and Moroun just got tossed in jail for contempt of court (the guy is a real piece of work).

If you’ve ever tried to navigate to the Ambassador bridge entrance, you know it is way less than ideal, especially for big truck traffic. Just saying, a new one might not be such a bad idea.

Mr Galt on May 19, 2012 at 11:44 PM

Also, that’s not a lot for local retailers to get exercised about either if the total amount of online sales is only 6% of peoples’ income.

Michigan businesses don’t like to compete: they are a bunch of lazy f*cks quite frankly.

And they continually want the government (State, Local, Federal) to bailout their sorry a$$es.

Mr Galt on May 19, 2012 at 11:47 PM

Well, here in Washington, if you take the initiative and show the Cashier your out of state license, regardless of being asked, you will not be charged the State Sales Tax on your purchase.

jaydee_007 on May 19, 2012 at 8:02 PM

I’ll remember that next time I’m in Washington. I went to Seattle last vacation, and now I’m feeling ripped. My own fault….

unclesmrgol on May 19, 2012 at 11:58 PM

Michigan already charges sales tax on online purchases. It’s a use tax, just add many other states have.

If you’re making purchases in Michigan on line and not paying the use tax, you are a tax cheat.

That said, I don’t think the answer is to make sometimes else responsible for collecting the tax.

spinach.chin on May 20, 2012 at 12:39 AM

The Gov could always end sales tax collections at retail establishments in Michigan. Thats entirely within the power of the state legislature, and requires no tilting at windmills. Screw the tax collectors, and screw Governor Snyder.

MTF on May 20, 2012 at 1:14 AM

Snyder and the Republicans have already raised a number of taxes and delayed other tax cuts for individuals in Michigan while cutting 3 Billion in taxes for business. He’s also trying to raise vehicle tax and several other fees in Michigan. He has been an unmitigated disaster for the average citizen in Michigan. He even makes Granholm look good and that’s hard to to do.

Goodale on May 20, 2012 at 2:01 AM

Amazon works affiliate programs where it’s viable.

Not THAT sort of affiliate program. The traditional Amazon affiliate program is where you put an Amazon link on your website and people click through to purchase from Amazon and the affiliate gets a couple of pennies. I am talking about something different. I am talking about where Amazon actually sells the inventory of local independent bookstores from their website. It basically gives Amazon thousands of additional distribution centers at no cost.

If that were a viable business model, Amazon would have done it a long time ago.

Oh, right, I keep forgetting that every single good idea has already been thought of long ago and no new business paradigms will ever be invented or tried by anyone. How could I forget.

Since you’re so smart, why don’t you set this up yourself – the only capital investment would be less that that of maxing out a single credit card (less than $5,000.00) to creat and market such a website. Why does Amazon have to do it if it’s such a brilliant idea?

jaydee_007 on May 20, 2012 at 2:23 AM

Something needs to be done to bring balance back to the unfair advantage of Amazon and other online retailers not having to collect sales tax while brick and mortar businesses have to.

SC.Charlie on May 20, 2012 at 6:15 AM

Scott Walker knows how to fix their problem.

bs4948800 on May 19, 2012 at 7:17 PM

This. It’s a spending problem, not a revenue problem.

Michigan is responsible for any advantage Amazon has by making it so expensive for local businesses to operate. Not just Sales Tax either.

Steveangell on May 19, 2012 at 10:04 PM

And this.

petefrt on May 20, 2012 at 8:31 AM

Mitch Daniels is all for this tax in Indiana . Amazon , ditto .

Lucano on May 20, 2012 at 9:07 AM

I never understand the argument AGAINST allowing the collection of Sales Taxes.

Look at it another way. It would probably be legal(but a bit creepy) to require that Internet retailers provide the various States DOV with lists of items purchased. Since Most States have laws on the books requiring you to pay a ‘Use’ tax on such purchases, it would be easy for them to match up the list with individual tax returns. Then they could hit you with the tax and huge penalties.

The problem is NOT that the retailer is being asked to collect what is a legal tax. It is that the tax exists at all.

But if Congress is going to pass a law on this at ALL, I would suggest that they make the tax of the SELLERS locale the one that applies. This would have the big advantage of driving businesses to locate in low tax regions and would promote growth there.

OBQuiet on May 20, 2012 at 9:16 AM

Just saying, a new one might not be such a bad idea.

Mr Galt on May 19, 2012 at 11:44 PM

Then let someone build one. If it is clear that there is a market for one, just let some private group build it. I do understand that there would need to be some governmental read-tape that would need cutting but beyond that why have government involvement?

I would think you of all people, Mr. Galt(may I call you John?), would see that.

OBQuiet on May 20, 2012 at 9:22 AM

TX just settled with Amazon.com – Amazon will start charging sales tax on all items across the board next month, pay $800m+ in back sales tax, and invest heavily in its North Texas operation.

Now this is understandable because Amazon does have a physical presence in Irving.

Does they in Michigan or is this just a money grabbing ‘fairness’ tax?

CorporatePiggy on May 20, 2012 at 9:47 AM

Then let someone build one. If it is clear that there is a market for one, just let some private group build it. I do understand that there would need to be some governmental read-tape that would need cutting but beyond that why have government involvement?

I would think you of all people, Mr. Galt(may I call you John?), would see that.

Do your research. That is the plan – to have a private party build the bridge.

Your point?

Mr Galt on May 20, 2012 at 12:03 PM

Michigan already charges sales tax on online purchases. It’s a use tax, just add many other states have.

If you’re making purchases in Michigan on line and not paying the use tax, you are a tax cheat.

That said, I don’t think the answer is to make sometimes else responsible for collecting the tax.

spinach.chin on May 20, 2012 at 12:39 AM

No one pays this. The documentation requirements the state has alone are an nearly insurmountable obstacle.

Let them assign me a bookkeeper at their expense, and I’ll pay the tax.

Mr Galt on May 20, 2012 at 12:06 PM

… and those local retailers have a 10% advantage (on average) over internet sales because they don’t charge you shipping and handling when you purchase from them.
AZfederalist on May 19, 2012 at 9:44 PM

DUH…do you think the retailer doesn’t have warehouses, doesn’t pay interest on the $$’s it carries in inventory, doesn’t have trucks and expense to ship it to their stores, doesn’t have the SHIPPING and HANDLING built into the price you pay? There is NO such advantage.

So it is not just the sales tax “savings”, but the sheer convenience time wise and being hassle free. AND if the local stores can’t compete on price, screw them.
So even if I had to pay a sales tax immediately with my amazon purchase, I still saved money with this option.
karenhasfreedom on May 19, 2012

Of course…both brick and mortar and on line have their own competitive advantages. The issue is whether GOVERNMENT should favor one over the other and tilt the playing field towards on line.

They do not have any such advantage.
Deleware and many other states charge no Sales Tax. States have the right to charge Sales Tax but it is their choice.
What we have here is States trying to have it both ways.
Steveangell on May 19, 2012

If Michigan VOTERS want Delaware TAXES…they can MOVE or vote differently. In the meantime…they pay MICHIGAN taxes for goods bought in Michigan…and ARE legally bound (though this is largely ignored) to pay the same tax on incoming shipments. If they don’t want to pay that tax…they should have Amazon ship it to Delaware, where they can pick it up. [/sarc]

camaraderie on May 20, 2012 at 1:19 PM

they should have Amazon ship it to Delaware, where they can pick it up. [/sarc]

Uh that won’t work either in many cases. You’ll still be liable for the use tax since the item will be used (hence the name, use tax) in Michigan. As I understand it (since I live near WA), Washington State will exempt any use tax on cars, various household goods if they’re over 90 days old. I’ve also heard stories that if you don’t have proof you bought the car out of state (aka its been years) they’ve been known to demand the fair market value use tax anyway on the car and you’re screwed if you want to register the car in WA.

You have many who cross the river from WA into Portland OR to buy goods with no sales tax. The WA dept of revenue has apparently been known to stop people crossing back on the bridges and harass people/businesses in other ways. The worst deal is for those that live in WA but work in OR. They pay OR income tax but have no representation in OR (no income tax in WA). Those folks should never be hassled about buying non sales taxed goods in OR.

These debates amuse me at times simply because I believe the internet has saved our economy these last 15 years, propping it up by increasing competition and sales opportunities.

Re internet vs brick n mortar
I once bought a dvd set at amazon that was $75 w/ free shipping, 75 at walmart.com and $99 at bestbuy online. Bestbuy local store was $130. I walked out of the store in disgust, went home and ordered it at amazon. It wasn’t even worth trying a price match for $99. I’ll wait a week and save $25. They’d killed my “gotta have it now buzz” with that price.

oryguncon on May 21, 2012 at 12:19 AM

Not THAT sort of affiliate program. The traditional Amazon affiliate program is where you put an Amazon link on your website and people click through to purchase from Amazon and the affiliate gets a couple of pennies. I am talking about something different. I am talking about where Amazon actually sells the inventory of local independent bookstores from their website. It basically gives Amazon thousands of additional distribution centers at no cost.

If that were a viable business model, Amazon would have done it a long time ago.

Oh, right, I keep forgetting that every single good idea has already been thought of long ago and no new business paradigms will ever be invented or tried by anyone. How could I forget.

crosspatch on May 19, 2012 at 8:13 PM

Actually, they already do it that way for their used-goods business model. Some vendors fulfil through Amazon-owned warehouses (in which case shipping is eligible to be free via “super saver”), or the vendor fulfils the order off their own shelf (in which case the buyer has to pay shipping – usually through USPS, which means you may pay several times the value of what you’re buying, and/or risk getting your goods shipped to the wrong continent. Both have happened to things I’ve ordered this way). If you read a lot of old books though, it’s often the only way to get what you’re looking for.

And yes, it works very well for the buyer, if you stick to reputable vendors (a feedback system similar to eBay is in place).

Blacksmith on May 21, 2012 at 12:58 AM

Rick Snyder is no tax and spend liberal.What a joke. How about his pushing for a new bridge to Canada we do not need?? He is nothing but a RINO–still holding my nose from having to vote for him! Now isn’t that pathetic?? “Having” to vote for someone-not becasue we like the candidate but just the best of two evils.

Bullhead on May 21, 2012 at 12:10 PM