Michigan Sales Tax Filing Update January 2020: Marketplace Facilitator Laws
Michigan passed a law requiring Marketplaces to collect and remit sales tax on sales facilitated through the marketplace effective January 1, 2020.
• Amazon, eBay, Etsy and Walmart will begin this collection on January 1, 2020.
You can review general information regarding Marketplace Facilitators and how your TaxJar Sales Tax Reports support these changes here in our FAQ.
In this article, we summarize Michigan's state guidance on the following questions:
- Do I need to register for a sales tax license in Michigan?
- Should I cancel my existing registration if all my sales are marketplace-collected?
- Do I need to collect sales tax on Michigan sales on non-marketplace platforms?
- Do I still need to file returns in Michigan?
- How do I file without paying double tax on the sales that were collected and remitted by my Marketplace?
I've never registered for a Michigan license. Do I need to register for a sales tax license in Michigan now?
- If you are a retailer with a physical presence in Michigan or you are a remote seller who has crossed the economic nexus threshold for Michigan ($100,000/year in gross revenue, or more than 200 separate sales transactions in Michigan in the last calendar year), then you will need to register for a Michigan sales tax license.
- If you've imported your sales across all platforms into your TaxJar account, you can determine if you have economic nexus in the state by running the Sales & Transactions Checker.
If you do not meet any of the criteria that create nexus in Michigan (physical, economic or otherwise), you won't need to register for a sales tax license in this state.
I have already registered for a license in Michigan and all of my sales are Marketplace-only sales. Should I cancel my existing registration?
If there is no presence in the state and the economic threshold is not met, then the marketplace seller does not need to remain registered.
- We always recommend checking directly with the state or a sales tax consultant who can provide more detailed advice specific to your business scenario prior to canceling your registration.
Do I need to collect taxes on my Michigan sales on other platforms?
Yes--if you have nexus in the state (physical or economic) and you make sales to customers in Michigan on platforms outside of the marketplace that is automatically collecting and remitting, you will also need to collect tax on your end on the Michigan orders that are processed on the other platforms.
Do I still need to file returns in Michigan?
If 100% of Michigan sales are coming from marketplace facilitators and there is no physical nexus in Michigan, then no return is required.
Returns must be filed if there is a physical presence in the state and marketplace facilitator sales are made.
- Sellers with inventory stored in Michigan need to register/remain registered for the General Excise Tax, if physical or economic nexus is present, then the wholesale rate must be charged to the marketplace facilitator and then remitted to the state.
I still need to file returns in Michigan. How do I do this without paying double tax on the sales that were collected and remitted by my Marketplace?
As of January 30, 2020, we are still gathering information on how to file your return in Michigan from the state. Please check back in the first week of February for more information.
If you make sales on other platforms in addition to the Marketplace, you'll need to make sure you remit the tax you collected for those sales when you file.
- If you have both marketplace and non-marketplace sales, our Report will show the jurisdictional breakdown for only the non-marketplace sales.
- If you're enrolled in AutoFile for Michigan, our system will handle the Marketplace sales deduction process automatically.