Michigan Retailers Assn. asks state treasurer to bill Amazon.com for sales tax owed to Michigan, says retailer's physical presence in state obligates it to pay sales taxes
EAST LANSING, Michigan
July 17, 2012
– The Michigan Retailers Association (MRA) today called on State Treasurer Andy Dillon to follow the law and his department's own guidelines by sending a bill to online giant Amazon for sales tax owed the State of Michigan.
"Because Amazon has a physical presence in Michigan it has sufficient nexus with the state and should be collecting sales tax for Michigan-based online purchases on its website," James P. Hallan, MRA president and CEO, wrote in a letter to Dillon. "We urge Treasury... to send a bill to Amazon for sales tax owed."
Amazon has established a physical presence in Michigan because, Hallan wrote:
• In 2007 Amazon acquired Brilliance Audio, a producer of audio books located in Grand Haven, as a wholly owned subsidiary;
• Amazon lists Brilliance Audio as one of its locations on the Amazon corporate website;
• A Dun & Bradstreet report on Brilliance Audio shows that it is a wholly owned subsidiary of Amazon; and
• Amazon's corporate address in Seattle, Washington, is listed as the address for all of Brilliance Audio's officers and directors, according to Brilliance Audio's corporate filings in Michigan.
Hallan pointed out in the letter that a seller is subject to sales tax collection if it has nexus with the State of Michigan under the Due Process and Commerce Clause of the U.S. Constitution. Brilliance Audio provides Amazon with that physical presence.
Treasury's guidelines under Revenue Administrative Bulletin 1999-1 state that nexus is established for out-of-state sellers through their in-state wholly owned subsidiaries, he said.
"Amazon has avoided collecting taxes on its Michigan sales for years," Hallan commented. "That harms Michigan's economy, is unfair to Michigan-based job providers and must stop. Other states have compelled Amazon to start paying taxes, and Michigan must do the same."