Victory in Michigan: Legislature Approves E-Fairness Bill
- By David Grogan
In late December, sales tax fairness proponents in Michigan won a big victory when the state legislature voted to pass e-fairness legislation. The Main Street Fairness bill, which awaits Gov. Rick Snyder’s (R) signature, would require remote retailers with nexus in the state via either online affiliates or warehouse/storage space to collect and remit sales tax to the state. The bill passed the Michigan House by a vote of 83–27 and by 25–13 in the Senate, as reported by the Detroit Free Press. The law is set to take effect in October 2015.
Following the vote, James Hallan, president and CEO of the Michigan Retailers Association (MRA), which had advocated on behalf of the legislation, said, “We are extremely pleased that lawmakers passed Main Street Fairness legislation, and we look forward to Gov. Snyder’s signature.”
Hallan noted in a statement that “this bipartisan legislation is an important victory for ‘the home team.’ It enables Michigan retail businesses to compete on a more level playing field with out-of-state merchants selling to Michigan residents. ‘Remote sellers’ such as Amazon will no longer be given an automatic six percent price advantage over Michigan businesses. That’s fair and it’s good public policy.”
Michigan joins 28 other states that have passed legislation requiring remote retailers to either collect and remit sales tax or require Amazon to collect sales tax as part of a deal to open a warehouse in the state. (In five of the 28 states, Amazon fired its online affiliates to avoid having to collect sales tax). Hallan noted that the growing number of states passing e-fairness legislation should have an influence on what the U.S. Congress does. “This legislation also hastens the day when Congress enacts a nationwide solution and provides a playing field that is 100 percent level,” he said.
According to the Tri-County Times, the Main Street Fairness law could generate about $50 million for Michigan. The state Treasury Department has estimated that $445 million in sales and use tax revenue from remote purchases went uncollected in 2014, nearly two-thirds of it from e-commerce.