Michigan has become the 20th state to approve legislation allowing states to join a multi-state sales tax simplification pact aimed at easing collection from out-of-state and Internet retailers.
Michigan Gov. John Engler signed the bill which was drafted and distributed to state legislatures by representatives of 33 states as part of the Streamlined Sales Tax Project, according to Reuters.
Those states will help decide the steps proposed to legislatures to simplify the complex web of varied taxes administered by thousands of local sales tax jurisdictions.
The difficulty of navigating that maze was a major reason why the Supreme Court ruled in 1992 that states could not require businesses without a physical presence in that state, such as Internet, phone or catalog retailers, to collect sales taxes on sales made to the state’s residents, the report said.
States are projected to lose $13.3 billion in 2001 with that number rising to $54.8 billion in 2011 from remote retail sales, according to a recent study. Michigan said its 2001 losses would be more than $500 million.
