Sales tax on Internet purchases

Michigan lawmakers are breathing new life into bills that would force retailers such as Amazon.com to collect the state’s sales tax on Internet purchases.  The House on Tuesday prepared the legislation for a possible vote as early as Wednesday. Similar bills are pending in the Senate after a committee approved them last week.  Retailers with stores in Michigan must collect the 6 percent sales tax when selling items online. But Internet-only stores like Amazon don’t have to assess the sales tax unless they have a physical presence in the state.  Traditional brick-and-mortar stores say Amazon has an unfair competitive advantage in selling tax-free goods.  Shoppers are supposed to voluntarily pay a 6 percent “use” tax for their online purchases when they file Michigan tax returns. But few do.  The Senate Fiscal Agency estimates that if the legislation is enacted, it could generate $50 million more a year in tax revenue for state and local governments. Legislators’ interest in the bills comes as they are looking to increase gasoline taxes or redirect tax revenue to improve deteriorating roads and other transportation infrastructure.  But the extra revenue generated by a sales tax on Internet purchases would fall far short of the $1.2 billion a year needed to bring roads up to par.   (AP)