2007 House Bill 4386 (FY 2008 Executive Budget “Revenue Enhancements” )

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• Introduced by Rep. Paul Condino on March 1, 2007, to create an "affiliate nexus" standard which would disregard a business’s form of organization as a defense to a determination by the state that a nonresident affiliate company without a physical presence in Michigan has a “nexus” here for purposes of requiring payment of the Michigan sales, use, income and business taxes. The U.S. Supreme Court has determined that states can only require sellers with a physical presence or “nexus” in a state to collect and tender sales or use tax on retail sales to residents, including Internet or catalog sales. The bill would extend the requirement to affiliates of companies with “nexus” in Michigan under certain circumstances. This is one of a number of “tax expenditure repeal” and related proposals included in Gov. Jennifer Granholm’s Fiscal Year 2007-2008 budget recommendation, which is based on approximately $1 billion in tax increases.
  • Referred to the House Tax Policy Committee on March 1, 2007.
    • Reported in the House on April 5, 2007, without amendment and with the recommendation that the bill pass.
• Passed in the House (60 to 48) on April 17, 2007, to create an "affiliate nexus" standard which would disregard a business’s form of organization as a defense to a determination by the state that a nonresident affiliate company without a physical presence in Michigan has a “nexus” here for purposes of requiring payment of the Michigan sales, use, income and business taxes. The U.S. Supreme Court has determined that states can only require sellers with a physical presence or “nexus” in a state to collect and tender sales or use tax on retail sales to residents, including Internet or catalog sales. The bill would extend the requirement to affiliates of companies with “nexus” in Michigan under certain circumstances. This is one of a number of “tax expenditure repeal” proposals proposed to pay for higher spending in the Fiscal Year 2007-2008 budget, and would increase the amount certain businesses pay by approximately $3.6 million. [Vote Details and Comments]
• Received in the Senate on April 19, 2007.
  • Referred to the Senate Finance Committee on April 19, 2007.

Comments

Introduced by Rep. Paul Condino on March 1, 2007. Passed in the House (60 to 48) on April 17, 2007. New Comment