UNDATED – Today is Cyber Monday, the day when online holiday sales are expected to peak. Online shopping hasn't overtaken traditional retail in terms of sales, but it has taken a bite out of them. It has also taken a bite out of tax revenue.
Since 1994, Michigan has relied heavily on its 6% sales tax to help fund municipalities and public education. But in recent years, state officials have been increasingly concerned about declining revenue from the sales tax. Online sales account for about 10% of holiday business. Out-of-state retailers aren't required to charge the sales tax, and that adds up to a loss of $200-$300 million dollars a year for the state.
Terry Stanton is with the Michigan Department of Treasury. He says to help mitigate the loss from those remote sales, Michigan has joined the Streamline Sales and Use Tax System.
"And that effort was really to align different states' sales tax systems so it was easier for those remote sellers to collect and remit sales taxes to the different states," Stanton says.
Stanton says he'd like to see national laws put in place that would help states collect taxes from remote sellers. Michigan residents who buy from retailers who don't charge the sales tax are still required to pay it when they file their income taxes.