The state House today unanimously approved a plan sponsored by Rep. Michael Webber to provide sales tax fairness related to retail sales – regardless of whether the retailer is operating inside or outside of Michigan.

The plan is not a new tax, but puts current Michigan practice started in October 2018 – based on a U.S. Supreme Court decision commonly known as the Wayfair ruling – into state law, leveling the playing field for retailers regardless of whether they have a store or other physical presence in the state. The bipartisan legislation also extends the practice to third-party sales facilitators, such as Amazon and eBay, requiring them to collect and remit Michigan’s sales tax from the sellers who sell on their marketplaces.

The measure applies to out-of-state retailers, including marketplaces, with at least $100,000 in annual sales or more than 200 separate transactions.

“This is not a new tax – it’s simply a fairness issue related to a current tax,” said Webber, of Rochester Hills. “If local stores must collect sales tax from their customers, out-of-state sellers should have to as well. This legislation provides fairness for Michigan retailers while reflecting a U.S. Supreme Court decision in our state law.”

The legislation will erase a built-in competitive disadvantage for Michigan retailers, who now suffer when shoppers locate an item in a brick-and-mortar store but then buy online through a third party to avoid paying state sales tax.

“The retail shops anchored in our downtowns and local communities help form the backbone of our economy,” said Kristi Trevarrow, executive director of the Rochester Downtown Development Authority. “Leveling the playing field for our hometown retailers competing against out-of-state retailers will preserve jobs and have a ripple effect benefiting all of Michigan.”

Webber sponsors House Bill 4542. His legislation, along with other bills in the package, advances to the Senate for further consideration.