Michigan Internet Tax, Business Killer

[XLFD]

Starting tomorrow, internet shoppers throughout Michigan may see something new tacked on the merchandise order page-- a 6% internet sales tax.  Back in January of this year, Republican Governor Rick Snyder received a bill crafted by the Republican-dominated Michigan Congress, which would compel companies with a 'presence' in Michigan to collect sales tax on internet sales to Michigan consumers. 

 The U.S. Supreme Court has ruled that state and local governments cannot force out-of-state companies to collect taxes for them, since this would interfere with interstate commerce.  States and localities may only require companies with a "substantial physical presence" or "nexus" in their state to collect sales taxes.

Michigan bricks-and-mortar businesses have lobbied for this law saying that it wasn't fair since they must remit to the state a sales tax while their out-of-state competitors don't.  In American society, taxes are supposed to pay for services that governments provide for their electorate. Out-of-state internet merchants with no physical presence in a state would not use any of the government services in that state. So in reality it would be unfair to tax out-of-state companies.  Taxation without representation-- wasn't that an important part of what made our forefathers revolt back in the thirteen colonies days?

Economists were definitely not consulted when this law was drafted, as it is a clear business-killer for Michigan.  Anybody who understands basic economic development should get the concept that internet-selling businesses will be less likely to create presences here in the state, those with 'substantial physical presences' already in Michigan, may decide to relocate to one of the many internet-friendly states to save the time, expense, and lost sales of doing business with the ten million Michiganders. 

Fairness between internet competitors would also be compromised, for if Company A had a nexus in Michigan but Company B didn't, savvy Michigan consumers would choose Company B's product if the prices were equal or even if Product A offered their's at 5% less. 

For those who believe Michigan is losing opportunities for revenue, figure that Michigan "loses" revenue all the time to states that tax less and tax better.  Conversely, it gains revenue over states that tax more and in imprudent ways, like this tax is.  That's healthy tax competition between states, which is positive for all consumers in this internet age. 

What will be negative is that Michigan state Republican leaders have screwed the taxpayers/consumers and Michigan's economic development for the hope that they can gain more money to run their dysfunctional government through a tax; a tax which is being challenged for constitutionality in the several other states that have decided to shoot themselves in the foot economically, just in order to try and get more money in the state coffers. 

Not hard to believe given that these same Republicans-In-Name-Only tried to raise the sales tax in May and have wandered off the reservation of fiscal conservatism in so many other ways, while they still can't even figure out how to fix our state roads wisely like other states manage to do. 

[Willy]

I can understand the merchants who have a physical presence in Michigan being upset that they must add 6% on their products when an internet company can sell their product for6% less. The only fair way to address this is to eliminate the sales tax but of course that will never happen.

[XLFD]

It's appealing to existing businesses with a stake in Michigan, primarily since it gets them on more of an even playing field as far as the sales tax aspect, but it's at a cost.  Five states have no sales tax, a couple of dozen others do not actively tax internet sales, they become immediately more desirable to set up  businesses that do transactions on-line at than Michigan.  It wouldn't be surprising that some with 'nexuses' in Michigan already are moving away quietly, so as to avoid all the extra time, hassle and expense made by this law. 

The unintended consequences make Michigan less competitive, simply because the politicians want more money-- money which they have freely gave away to these businesses to move or stay here in the first place via corporate welfare.

[AQUAMAN]

Not only that, but I and many millions more avoid retailers that have sales tax added, unless they have a monopoly on that product. So, Michigan loses, and others will gain. Just another stupid way to gain more money, and in the end, they only hurt Michigan suppliers, real smart! This is why Michigan is losing when it comes to both D&R's, they both are way too greedy, and crooks. 

[XLFD]

Six years ago, Governor candidate Snyder was campaigning on how to make Michigan attractive to businesses and running Michigan smartly to capitalize on his successful business ventures, it was an attractive appeal to the harm that Governor Granholm had inflicted the previous eight years to the state. 

Now it's become Snyder's turn to blow us away by endorsing every tax scheme that comes his way so that he and his Republican-led congress can make Michigan less attractive to business, while it appears that he has decided to become a dumb nerd and run Michigan as inefficiently as his predecessor.  This leads to a truism:  If one party (Democrat or Republican) controls the Executive and Legislative branch of Federal or State Government your pocketbook will come under assault.