Michigan's 6% sales tax for online purchases, out-of-state retailers goes into effect

Online shopping (WDIV)

DETROIT - The state of Michigan's 6 percent sales tax on everything sold to consumers in the state, including items purchased online from retailers located outside of the state, goes into effect Monday. 

The U.S. Supreme Court paved the way for this tax back in June when it made a 5-4 ruling to overturn  two decades-old Supreme Court decisions that impacted online sales tax collection.       

The state estimates it will bring in an extra $200 million in revenue a year. Governor Rick Snyder's administration recommended the money be spent on fixing Michigan's roads.

Here's the explanation from the state of Michigan's Department of Treasury:

For decades, U.S. Supreme Court precedent required an out-of-state (or remote) seller to have physical presence in a state before that state could require the seller to collect, pay, or remit sales tax on sales into that state. However, on June 21, 2018, the U.S. Supreme Court overturned those precedents in South Dakota v Wayfair, holding that physical presence is no longer required.Specifically, the Court concluded that South Dakota’s law, which mandates the collection and remittance of sales tax if the seller had sales exceeding $100,000 or 200 or more transactions with South Dakota purchasers in the prior calendar year, is constitutional. In other words, the Court upheld “economic presence” nexus for sales tax.

Consistent with Wayfair, effective after September 30, 2018, Treasury will require remote sellers with sales exceeding $100,000 to – or 200 or more transactions with – Michigan purchasers in the previous calendar year to remit sales tax. Treasury will waive failure to file and deficiency penalties for returns and payments due prior to December 31, 2018, so long as the taxpayer incurring those penalties has nexus solely due to RAB 2018-16 and Wayfair; interest will not be waived. 

Here is the WDIV report from June 21:

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