online sales tax | Michigan Radio
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online sales tax

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Michigan decided last week to collect sales tax from online businesses -- which could increase the state's tax revenue by almost $250 million in the next three years.

But the question now is what to do with that extra money.

Tax forms
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The Michigan Department of Treasury announced earlier this month that online retailers with no physical presence in Michigan will have to pay the state's sales tax starting October 1st.

The decision follows a Supreme Court case from this past June that upheld South Dakota's right to charge online shops for sales taxes. Michigan will adopt the same taxing model that South Dakota uses for their online retailers, meaning that the tax will apply to businesses who sold more than $100,000 worth of goods or made over 200 transactions in the state in the past year.

steve carmody / Michigan Radio

Many online shoppers may have to start doing something new: pay sales tax.

The U.S. Supreme Court ruled today states can force online shoppers to pay sales tax.  

The decision came in a case that pitted the state of South Dakota and online shopping giant Wayfair.

The 5-4 ruling Thursday is a win for states, who said they were losing out on billions of dollars annually under two decades-old Supreme Court decisions that impacted online sales tax collection.

Steve Carmody / Michigan Radio

Starting Thursday, more online companies will add the Michigan sales tax to purchases made by Michigan customers.

Online retail giant Amazon is among the companies that will add the 6% tax to their bills.

Tom Scott with the Michigan Retailers Association says compelling online companies with a presence in Michigan to charge the sales tax is a matter of fairness.