Michigan House Bill HB5745

Michigan 2023-2024 Regular Session

• Introduced: 5/23/24
• Refer: 5/23/24

Caption

Sales tax: other; nexus of marketplace facilitators; clarify. Amends sec. 2d of 1933 PA 167 (MCL 205.52d).

Impact

The review of HB 5745 highlights its implications on the local economy, especially concerning eCommerce platforms. It ensures that marketplace facilitators are treated equally under tax law regardless of their physical presence in the state. This uniformity in tax collection aims to level the playing field for local businesses competing with online retailers, thereby impacting local sales tax revenue. By mandating the collection of sales tax from online sales, the state expects to boost its revenue from these transactions and ensure compliance with existing tax obligations.

Summary

House Bill 5745 is a legislative proposal aimed at amending the General Sales Tax Act in Michigan to clarify the responsibilities of marketplace facilitators concerning sales tax. According to this bill, marketplace facilitators, which can include entities that facilitate sales through online platforms, are required to remit sales taxes on taxable sales made directly and those facilitated for others. This legislation impacts both the marketplace facilitators and sellers in regard to their tax liabilities and compliance obligations.

Contention

While the bill aims to streamline tax remittance for online sales, it raises concerns for some marketplace facilitators about liability and compliance. Notably, the bill states that a class action cannot be launched against a marketplace facilitator regarding overpayments of sales tax. This provision has been seen as both a protective measure for facilitators and a potential limitation on consumer rights. Overall, the discourse around this bill suggests a need for further dialogue regarding the balance between tax compliance and consumer protection in the rapidly evolving digital marketplace.