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Lane
Lane, JD, CFP, MBA, CRPS
Category: Tax
Satisfied Customers: 10103
Experience:  Law Degree, specialization in Tax Law and Corporate Law, CFP and MBA, Providing Financial & Tax advice since 1986
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HOW MUCH IS OUR STATE TAX WHEN YOUR MAKING AN ORDER ONLINE.

Customer Question

HOW MUCH IS OUR STATE TAX WHEN YOUR MAKING AN ORDER ONLINE.
Submitted: 9 months ago.
Category: Tax
Expert:  Lane replied 9 months ago.

Hi,

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When a seller, online, has a physical presence in a particular state, such as a store, business office, or warehouse, (this is called nexus) it has to collect sales tax from customers in that state.

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But, if a business doesn't HAVE that physical presence in a state, it's not required to collect sales tax for sales into that state. the( rule comes from a*****decision) which held that mail-order merchants did not need to collect sales taxes for sales into states where they did not have a physical presence.

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Now, in Michigan, use tax is required by law when a person purchases a good from out of state and the retailer hasn't charged sales tax in their jurisdiction.

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It is a 6% tax owed on purchases made outside of Michigan.

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Use tax is due on catalog, telephone, or Internet purchases made from out-of-state sellers as well as purchases while traveling in foreign countries when the items are to be brought into Michigan. Use tax must be paid on the total price (including shipping and handling charges).

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Sorry for the data-dump, I just wanted to cover all of the ways that this could come at you.

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Here's an excellent overview of how to figure the tax:

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https://www.taxslayer.com/support/1153/michigan-use-tax

Expert:  Lane replied 9 months ago.

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I hope this has helped.

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Please let me know if you have any questions at all.

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If this HAS helped, I'd really appreciate a positive rating (using the rating request, faces, or stars on your screen)

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That's the only way I'll be credited for the work here.

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Thank you!

Lane

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