Online Sales Tax Collections Increasing

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The state of Michigan will begin collecting sales taxes on online purchases from out of state sellers next month. The Michigan Department of Treasury tells us a recent U.S. Supreme Court decision has prompted it to change the state’s sales tax administration. Shoppers were previously required to track and annually self-report uncollected taxes from mail order and online retailers physically located outside of Michigan. Treasury says this week’s announcement allows for the more efficient collection of the sales tax by collecting from businesses rather than individuals. In June, the U.S. Supreme Court overturned a more than 30-year precedent allowing the Michigan Department of Treasury to collect sales tax from retailers physically located outside the state if the retailer exceeds $100,000 in sales or 200 or more transactions in Michigan within the previous calendar year. The state Treasury Department estimates more than $200 million in additional state revenue will be collected each year under the new sales tax rule.