New Standards for Michigan Sales and Use Tax Nexus
Any company with sales in Michigan should consider how the new affiliate and click-through nexus standards for Michigan sales & use tax affect their tax liability. The new nexus laws could create a Michigan filing requirement for companies that did not previously have one. The new law approved by the Michigan Governor Rick Snyder in January of 2015 will be effective on October 1st, 2015.
New Affiliate Standards
The new affiliate standards to expand nexus include, but are not limited to:
- Independent contractors and other affiliated persons that engage in promoting sales, installation, delivery, assembly or maintenance and repair of tangible personal property in Michigan,
- Any property that is involved in the above processes,
- Any company located in another state who delivers tangible personal property to Michigan with their own vehicles,
- Any independent contractor engaged to install property in Michigan, and;
- Companies who maintain an office or warehouse to facilitate sales or allow customers to return or pick up property in Michigan.
If a company has very few sales to Michigan and has irregular contact with Michigan purchasers, they may be able to claim exemption from Michigan sales and use tax on their sales.
Contact a member of the Barnes Dennig State and Local Tax Group here to find out more about these new standards and if they apply to your company.