Michigan losing $242M in untaxed online sales

Jul 15, 2012

Michigan's Treasury Department says the state will lose about $242 million in tax revenue from Amazon and other online retailers.

States have trouble collecting sales taxes from sellers that don't have a physical presence within their borders. Amazon owns Grand-Haven-based audio book publisher Brilliance Audio, but Treasury spokesman Terry Stanton says Michigan considers it a separate entity.

 The Detroit Free Press reports that job listings suggest Amazon is planning a software development center in Detroit. That physical presence would give Michigan greater ability to collect sales taxes on Amazon sales to Michigan residents.

Amazon collects sales taxes for sales to residents of Kentucky, Nebraska, New York, North Dakota, Texas and Washington.

Laws requiring the collection of online sales taxes will take effect in California, Indiana, Nevada and New Jersey.