Michigan Retailers celebrated Thursday as Governor Rick Snyder signed legislation designed to require companies selling goods online to Michigan residents to charge the state’s 6 percent sales tax.
Retailers have long sought the bills in response to companies like Amazon not charging Michigan sales tax and dubbed the legislation “Main Street Fairness,” contending they had situations where customers would visit their stores, see products, ask questions about them and then purchase for less from an online retailer that did not assess the sales tax.
SB 658 (PA 553) and SB 659 (PA 554) take effect October 1.
“It puts our retailers at a competitive disadvantage,” Mr. Snyder said at a signing ceremony of the law. “That’s not right.”
The Senate Fiscal Agency projects the legislation could yield as much as $60 million annually for the state, although the amount could vary substantially. If Congress passes a law making clear online retailers have to recognize state sales taxes, the amount would grow into the low hundreds of millions, Mr. Snyder said.
Some conservatives have attacked the legislation as a new tax, but Mr. Snyder pushed back.
“Some people like to talk about are you increasing taxes. We are not at all,” he said. “This is a collections issue.”
The bill sponsors, Senate Minority Leader Jim Ananich (D-Flint) and former Rep. Eileen Kowall (R-White Lake Township), said the legislation would protect local businesses and local workers.
Barb Stein, owner of the Great Northern Trading Company in Rockford, praised the legislation.
“We are part of the fabric of our local communities,” she said. “This legislation treats us fairly and that’s what we asked for.”