Michigan loses $300 million in sales tax annually to online shopping

Mar 22, 2011

Michigan’s budget problems could be helped if the state were able to collect taxes on things people buy online. But federal rules limit the state’s powers.

The U.S. Supreme Court says states can’t force a business to collect sales taxes unless it has a physical store in the state.

Terry Stanton is with the Michigan Department of Treasury.

He  says that’s costing Michigan big money.

"We estimate that's more than $300 million a year that the state will miss out on because there's no requirement for sellers to collect the sales taxes," Stanton says.

Stanton says Michigan residents who shop online are expected to report their taxable purchases on their tax form.

But he admits enforcing the law is very difficult.