Showing 17 posts in Use Tax.
Just the Beginning: Click-Through Nexus after Wayfair
This is the third in a series of articles written for MICPA members examining the far-reaching impact of the Supreme Court’s decision in South Dakota v. Wayfair, Inc. Read More ›
Categories: Tax, Tax Disputes, U.S. Supreme Court, Use Tax
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After Wayfair, Is Michigan’s Legislative Nexus Standard the New Bright Line?
This is the second in a series of articles written for MICPA members examining the far-reaching impact of the Supreme Court’s decision in South Dakota v. Wayfair, Inc. Read More ›
Categories: Tax, Tax Disputes, U.S. Supreme Court, Use Tax
Michigan Department of Treasury Sheds Light on Nexus Standards Related to Michigan Business Taxes
Some businesses are (unpleasantly) surprised when they learn they are responsible for taxes -such as sales and income taxes - in states in which they have no physical presence. What gives rise to liability in these situations is “economic nexus,” which relates to a business’ activity, such as the generation of sales without a physical presence, in a state. Nexus, therefore, can be a hidden trap for businesses with multistate sales and other activities, particularly because what gives rise to nexus is often uncertain and unexplained by a state’s taxing authority.
Michigan Department of Treasury (the “Treasury”) has shed light on what constitutes nexus in Michigan through the issuance of a release that explains the nexus standards for Michigan business taxes. The release (the “Release”) addresses the sales and use tax presumption for out-of-state sellers; the nexus standards for the corporate income tax; and the nexus standards for flow-through entity withholding. Read More ›
Categories: Corporate Income Tax, News & Events, Sales Tax, Use Tax
Michigan Sales and Use Tax Audits: What You Need to Know
Sales and Use taxes are basically a 6 percent tax on the sale, use and consumption or storage of tangible personal property in the state of Michigan. Michigan has ramped up its enforcement of these two taxes. In short, Michigan is getting less revenue from its traditional tax basis so the state is really looking to enforce compliance with the sales and use tax more than what they used to. What does that mean for you? It means that you might get audited. Learn more about what you should do if you get audited in the video below.
Categories: Sales Tax, Use Tax
Michigan Other Deductions Manual – A Helpful Resource for Sales and Use Tax Exemptions
The Michigan Department of Treasury has published its Other Deductions Manual (the “Manual”). The Manual provides a listing and analysis of the common sales and use tax exemptions.
If you are a business subject to Michigan sales or use tax, then the Manual is a helpful resource to have on file.
The Manual can be downloaded by clicking this link.
Categories: Sales Tax, Use Tax
Notice of New Sales and Use Tax Requirements for Out-Of-State Sellers
Under a new law effective October 1, 2015, an out-of-state seller may be required to remit sales or use tax on sales into Michigan if the seller has nexus under amendments to the Michigan General Sales Tax Act (MCL 205.52b) and Michigan Use Tax Act (MCL 205.95a). The new law creates a presumption that a seller is engaged in the business of making sales at retail in Michigan if the seller, or another person on the seller’s behalf, engages in certain activities in Michigan. In addition, a seller will be presumed to be making sales in Michigan if the seller enters into an agreement with one or more Michigan residents under which the resident, for a commission or other consideration, refers potential purchasers to the seller, such as by a link on a website). This is sometimes referred to as “click-through” nexus. If you are a seller that sells into Michigan on or after October 1, 2015, and you are not already registered with the Department of Treasury and remitting sales or use tax, you may need to register for Michigan sales and use tax. For information regarding Michigan’s tax registration and remittance requirements, please contact a member of Foster Swift's State and Local Tax group.
Categories: Sales Tax, Use Tax
Michigan Supreme Court Clarifies Use Tax Exemption Apportionment Rules
On July 22, the Michigan Supreme Court decided Detroit Edison Company v. Department of Treasury, holding that the Michigan Use Tax apportionment rules apply in situations where property is simultaneously used for exempt and non-exempt purposes. The claim was initiated by Detroit Edison Company ("DTE") in response to a use tax audit by the Department of Treasury. The audit determined that DTE wrongly claimed an exemption from use tax for property used outside of its plant (transformers, fuses, circuit breakers, etc.), resulting in a deficiency assessment of over $13 million plus interest. Read More ›
Categories: News & Events, Use Tax
Michigan Passes New “Amazon Tax” Law Requiring Internet Sales Tax Collection
Online shopping continues to increase in popularity. But it's not just the convenience of having a package arrive at one's doorstep without having to trudge to the mall that many shoppers prefer. Some online retailers do not collect sales tax on purchases, meaning that online shoppers in Michigan have historically been able to avoid paying Michigan's 6 percent sales tax - which Michigan bricks and mortar retailers are required to collect at the time of purchase. That's not to say that online purchases are tax free, as Michigan residents are obligated to report online purchases on their tax returns and pay 6 percent use tax. But most taxpayers ignore - or are not even aware of - this obligation.
Michigan retailers have long lamented what they perceive as an un-level playing field in their battle with online retailers, and the state government estimates that hundreds of millions of dollars in tax revenue is not collected every year on online purchases. If a recently passed law has its intended effect, sales tax collections on online purchases should experience a surge. Read More ›
Categories: News & Events, Sales Tax, Use Tax
Michigan Sales and Use Tax Audits
Every year, the Michigan Department of Treasury audits Michigan businesses for compliance with the Sales and Use tax laws. Oftentimes, those audits result in tax assessments that are disputed by the taxpayer. But, how does a taxpayer navigate the audit process and challenge a tax assessment? Read More ›
Categories: Sales Tax, Tax, Use Tax
Are you missing out on these exemptions?
There have been several recent tax changes to Michigan tax law. New exemptions may be valuable to you. Consult a tax professional for advice as to how to make the most of available tax benefits.
Sales Tax Exemption for Vehicle Trade-Ins
Starting Dec. 15, 2013, up to $2,000 of the value of a motor vehicle or recreational vehicle traded-in to pay for a new or used motor or recreational vehicle may be exempt from sales tax. The agreed-upon value must be separately stated. Starting Jan. 1, 2015, the exemption limit is increased by an additional $500 per year.
Use Tax Exemption for Vehicle Trade-Ins
Also starting Dec. 15, 2013, up to $2,000 of the value of a motor vehicle or recreational vehicle traded-in to pay for a new or used motor or recreational vehicle may be exempt from use tax.
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