House
Bills 4202
and 4203
passed the House Tax Policy Committee this Wednesday on an interesting vote of
9-1 with 5 abstentions – 2 of the abstentions coming from Committee Chair Jeff
Farrington (R-Utica) and Democratic Vice Chair Vicki Barnett (D-Farmington
Hills).
The
yes votes on the two bills came from Republican Representatives Kevin Cotter
(R-Mt. Pleasant), Frank Foster (R-Petoskey), Tim Kelly (R-Saginaw), Lisa
Posthumus Lyons (R-Alto), Margaret O’Brien (R-Portage), and Amanda Price
(R-Park Township), and Democratic Representatives Harold Haugh (R-Roseville),
Bill LaVoy (D-Monroe), and Jim Townsend (D-Royal Oak).
Chairman
Farrington and Vice Chair Barnett were joined by Representatives Aric Nesbitt
(R-Lawton), Pat Somerville (R-New Boston), and Jon Switalski (D-Warren) in
abstaining.
The
measures propose to require certain online retailers to collect and remit the
Michigan 6 percent sales or use tax if they have a presence in the state;
however, many feel the issue is a federal one and should be handled by
Congress. A bill has passed the U.S. Senate and is awaiting action in the U.S.
House, something others believe is highly unlikely to pass, resulting in the
need for action at the state level.
“Brick
and mortar” retailers essentially face a 6 percent disadvantage over online
retailers who do not collect the sales tax – a fact the Department of Treasury
backs-up by stating that an estimated roughly $289 million in uncollected sales
and use tax for the fiscal year 2013-2014 is due to online sales.