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2004 House Bill 5502: Sales tax on internet and catalog purchases
Public Act 172 of 2004
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- Introduced by Rep. Lorence Wenke (R) on February 10, 2004, to make changes to state use tax act to accommodate a multi-state agreement to create a centralized system for the collection of use or sales tax on purchases made by Michigan citizens from out-of-state merchants through catalogs or the Internet. The bill creates new definitions and categories of which items or services are subject to the tax and which are not. The bill is part of a "streamlined sales tax" package comprised of House Bills 5502 to 5505.
- Referred to the House Tax Policy Committee on February 10, 2004.
- Reported in the House on March 30, 2004, with the recommendation that the substitute (H-1) be adopted and that the bill then pass.
- Substitute offered in the House on May 20, 2004, to replace the previous version of the bill with one containing technical changes that do not affect its substance as previously described. The substitute passed by voice vote in the House on May 20, 2004.
- Referred to the House Tax Policy Committee on February 10, 2004.
- Passed 78 to 26 in the House on May 20, 2004, to make changes to state use tax act to accommodate a multi-state agreement to create a centralized system for the collection of use or sales tax on purchases made by Michigan citizens from out-of-state merchants through catalogs or the Internet. The bill creates new definitions and categories of which items or services are subject to the tax and which are not, and eliminates some exemptions. The bill is part of a "streamlined sales tax" package comprised of House Bills 5502 to 5505.
Who Voted "Yes" and Who Voted "No" - Received in the Senate on May 25, 2004.
- Referred to the Senate Finance Committee on May 25, 2004.
- Reported in the Senate on June 8, 2004, with the recommendation that the bill pass.
- Amendment offered in the Senate on June 8, 2004, to move back the date the bill goes into effect, from July 1 to Sept. 1, 2004. The amendment passed by voice vote in the Senate on June 8, 2004.
- Referred to the Senate Finance Committee on May 25, 2004.
- Passed 29 to 8 in the Senate on June 9, 2004, to make changes to state use tax act to accommodate a multi-state agreement to create a centralized system for the collection of use or sales tax on purchases made by Michigan citizens from out-of-state merchants through catalogs or the Internet. The bill creates new definitions and categories of which items or services are subject to the tax and which are not, and eliminates some exemptions. The bill is part of a "streamlined sales tax" package comprised of House Bills 5502 to 5505.
Who Voted "Yes" and Who Voted "No" - Received in the House on June 9, 2004.
- Passed 78 to 29 in the House on June 22, 2004, to concur with the Senate-passed version of the bill.
Who Voted "Yes" and Who Voted "No" - Signed by Gov. Jennifer Granholm on June 28, 2004.
Most Recent Comments
1) Wrong on nearly every point by Anonymous Citizen on September 27, 2004Two posts on this point by you have been very wrong, either directly on the facts or in the inferences you attempt to make.
First, you obviously hate Wal-Mart. That's fine. You need to realize, though, that Wal-Mart LOVES the internet tax and enthusiastically endorses it PRECISELY because they are multi state and must already charge sales taxes in nearly every jurisdiction.
Small businesses existing in only one state, yet selling over the net, take advantage of the present tax loophole and don't have to charge sales taxes in any state but their own.
THIS LEGISLATION "LEVELS" THE PLAYING FIELD IN FAVOR OF WAL-MART AND THE BIG GUYS! If you like big corporations getting an advantage over small ones in the tax code, then this new law is for you!
Second point is that the internet did not make these purchases legal. Catalog purchases have allowed people to evade sales taxes for many decades (since the 1930's).
Cash hungry states tried to strike out this advantage, but the US Supreme Court struck them down -- effectively legalizing sales tax evasion for companies that do not have a nexus in the state that they are selling into.
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It is quite obvious from your post that you graduated from the illustrious government institutions that you seek to support with my hard earned currency. Unfortunately, the self-esteem focused education system has taught you very little concerning vocabulary, correct spelling, and critical thinking skills. I have no problem paying my "dues" for services necessary to provide for the general welfare, but I do not agree with my tax dollars being spent on failing education systems, race preferences in government contracts and admittance to publicly funded universities. I think that when the economy is slightly depressed(stop with the G.W. diatribe), government should 'suck it up' and tighten their belts in the same manner that I have to in my small business. Government should be spending as much time on reviewing the necessity of programs and spending as they do trying to collect the last dime I have in my pocket.
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The courts have already ruled that tax schemes concocted by the individual states along these lines are unconstitutional.
This also ignores the fact since the “brick and mortar” businesses do not have any physical presence in a particular state, they receive no benefit from the taxes they would be compelled to pass on to their customers.
You should note, that I did not say that the businesses would not pay the tax themselves, because any tax would simply be passed along to the customer.
And there is no guarantee that if any system is put in place, that it would be able to constantly and accurately compute the correct amount of tax to place on an item. The software would need to have the tax rates of several thousand units of government on hand and be able to update them on a moment’s notice.
How often do large companies, say like Microsoft, issue warning and updates due to errors that creep into their software?
Finally, what is there to keep the purchase of large ticket items from moving from high tax to low tax areas?
If a resident were to make a large ticket purchase online; say a computer, entertainment system, or high value collectable, what’s to stop them from including the shipping address of a friend or relative in a city or state with a lower tax rate?
Lansing doesn’t have a problem with income; it has a problem with spending.
Instead of looking for a problematic method of collecting taxes that will mostly likely be shot down in the courts (again) after it is implemented, they should begin to address their uncontrollable urge to spend money.
This bill should not be allowed to come up for a vote.
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