South Dakota v. Wayfair Update: Michigan

The Michigan Department of Treasury has issued guidance for out-of-state vendors regarding the Supreme Court’s Wayfair decision. The Revenue Administration Bulletin (RAB) states that a seller with substantial nexus in Michigan is required to remit sales or use tax on sales of taxable tangible personal property made into this state and file all required returns. Nexus can be established in several different ways:

  1. The seller can have physical presence in Michigan as described in RAB 1999-1.
  2. The seller can have representational, attributional, or “click-through” presence as described in RAB 2015-22.
  3. A seller can have economic presence as discussed in Wayfair.

After September 30, 2018, a seller that has sales into Michigan (both taxable and non-taxable) exceeding $100,000, or a seller that completes 200 or more separate transactions of sales into this state (both taxable and non-taxable) in the previous calendar year has nexus in Michigan and is required to collect and remit sales tax, as well as file returns on all such sales into the state.

New Sales Tax Landscape for Online Sellers

The recent U.S. Supreme Court ruling in South Dakota v. Wayfair overturning the long-held Quill decision will dramatically change the landscape for online sellers when it comes to sales tax.

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