Tax fairness helps Main Street job providers and businesses

Categories: Blog Features,Initiatives,Pure Michigan

The Michigan Legislature voted this week to continue
Michigan’s economic recovery by passing legislation
that puts local businesses on the same playing field
as national online retailers.

The biggest myth about Main Street Fairness legislation is that it creates a new tax.

This is absolutely not true.

Those of us who purchase goods online from out-of-state retailers are supposed to report sales tax on those items when filing our taxes each year, but it’s a confusing and often times overlooked step in the process.

This legislation—Senate Bills 658 and 659—provide clarity by simply moving the tax to the point of sale so Michiganders aren’t responsible for reporting online sales taxes annually.

Our economy thrives when there is healthy business competition and Main Street Fairness legislation gives brick-and-mortar businesses this valuable chance in an ultra-competitive market.

Many community businesses have online presences as well, so we’re really trying to promote economic fairness across the board. Local retailers shouldn’t get an unfair advantage, but we certainly owe them the fairness that these bills provide.

Rep. Rob VerHeulen

Michigan’s main street businesses create jobs, employ our friends and family and are mainstays in local communities. An unfair tax code hurts small, local businesses the most, and they’re the ones who deserve a fair shot in a globally competitive market.

Another myth about this legislation is that it only applies to Amazon. This is another half-truth.

  • Does the legislation apply to Amazon? YES
  • Does it also apply to all other out-of-state companies with a physical presence in Michigan? YES
  • Does it apply to out-of-state companies with no physical presence in Michigan? NO

Only companies with a defined physical presence in the state of Michigan will be affected by this legislation. The bills specify that physical presence includes subsidiaries and affiliate networks of larger companies, such as Amazon.

To sum it up, this package simply sets out to close a tax loophole and put Michigan’s small businesses on the same footing as large, out-of-state retailers. This common-sense legislation gives Michigan consumers the opportunity to make purchases based on the merits of a business’ goods and services, not who happens to receive special treatment under the tax code.