West Michigan Businesses Want To Raise Your Taxes
Ever bought something online in order to avoid paying Michigan's 6% sales tax? Some lawmakers and West Michigan businesses want to put an end to this cost-saving practice.
When you make a purchase online and the online retailer does not collect Michigan's 6% sales tax you are still required to pay the tax, but the honor system hasn't been working.
Some West Michigan businesses feel that the playing field needs to be leveled. They say they can't compete against online retailers who don't collect the tax. It is a particularly large problem on big-ticket items when not paying the 6% tax can mean big savings for a customer.
Dan Marshall of Marshall Music talked with mlive.com, they reported:
Shoppers regularly browse guitars, drums and other music products in his store, then buy them from online retailers that don’t collect Michigan’s 6 percent sales tax.
It has cost Michigan a lot of money too.
Last year, 104,000 law-abiding citizens paid $5.25 million in sales taxes on remote sales through their state income tax returns, according to the Treasury Department.
But most don’t pay the tax, and there is little enforcement.
Michigan will lose an estimated $396 million in tax revenue from remote sales next year, according to a 2010 Treasury Department report.
There has already been legislation introduced to help states collect the tax.
With so much money involved and government budgets under stress, it may only be a matter of time before stories of "tax-free" internet purchases become a thing of the past.