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Holland business owner helps form Michigan Main Street Leadership Council | Business

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Holland business owner helps form Michigan Main Street Leadership Council
Holland business owner helps form Michigan Main Street Leadership Council

Job makers and small business owners across the state today announced the formation of the new Michigan Main Street Leadership Council, a steering committee that will work with lawmakers in Lansing to close the Internet sales tax loophole, level the playing field for local businesses on "main street” and protect Michigan jobs. The state House of Representatives is currently considering bipartisan House Bills 5004 and 5005 that would close the loophole and recognize that a sale is a sale is a sale.

“Job makers are standing together across Michigan asking lawmakers to do the right thing and level the playing field for small businesses,” said James P. Hallan, President and CEO of the Michigan Retailers Association, which represents 12,000 individual storefronts. "A sale is a sale is a sale but because of the Internet sales tax loophole, out-of-state online-only mega retailers like Amazon are able to sell products at a six percent discount, making it harder for local job makers to succeed. The Michigan Main Street Leadership Council believes the state's tax code should be fair and should no longer threaten Michigan jobs.”

The Michigan Main Street Leadership Council is made up of small business owners and job makers from across the state, including:

  • James Hallan, Michigan Retailers Association;
  • Jamie Nye, Great Turtle Toys, Clarkston and Mackinac Island;
  • Thomas ―Bert” Weidner, Woodward Camera, Birmingham;
  • Ron Estes, Associate General Counsel, Center Management Services, Birmingham;
  • Barb Stein, Great Northern Trading Co., Rockford;
  • Matt Norcross - McLean and Eakin Booksellers, Petoskey;
  • Kim Volz - The Dive Shop, Flint;
  • Sue Majerek - Majerek's, Niles;
  • Gary Foote - Woodcraft of West Michigan, Grand Rapids;
  • Tim Webster, Websters Pro-Shop, Gaylord and Petoskey;
  • Bill Golden, Golden Shoes, Traverse City;
  • Ken Vos, Gameroom Gallery, Holland;
  • Candy Lancioni, Aunt Candy's Toy Company, Rockford;
  • Lynn McDowell - McDowell's of Grand Ledge, Grand Ledge; and
  • Carla Merrill, Norm Henry Shoes, Owosso

“At our stores we are fighting every day to make the sale, to provide jobs and to contribute to our communities,” said Kim Volz, owner of the Dive Shop in Flint. "Every day we lose sales to shoppers who are able to purchase the item from an online retailer that does not collect Michigan's sales tax. The price is often the same, but the sales tax makes the difference. This is a fairness issue and we need to do something about it now.”

When consumers buy a product online, Michigan law says the consumer must pay the same sales tax he or she would if buying the product from a store in person. Under Michigan's current sales tax collection system, out-of-state, online-only retailers are exploiting the massive legal loophole, allowing them to forgo collecting sales tax at the point of sale. Online-only retailers use this loophole to attract shoppers away from brick-and-mortar businesses by using deceptively lower prices, since Michigan retailers must add - and collect - the 6-percent sales tax to the customer's bill. As a result, Main Street businesses are put at a significant competitive disadvantage that puts Michigan's business community at risk.

Last fall Representatives Eileen Kowall and Jim Ananich introduced the Michigan Main Street Fairness Act, a bipartisan legislative package that protects job makers  across the state by closing the sales tax loophole putting Michigan businesses at risk.

To close the sales tax loophole the Michigan Main Street Fairness Act:

  • Moves online-only retailers under the same sales tax collection laws under which Michigan brick-and-mortar businesses operate; and
  • Expands the definition of ―nexus” or ―physical presence” to include retailers who conduct business through affiliate businesses in Michigan or own subsidiary companies in an attempt to avoid paying sales tax.

According to a report by Lansing-based Public Sector Consultants, the sales tax loophole has a significant negative impact on job makers and the state's economy. The study found that closing the loophole would directly lead to the creation of as many as 1,600 new jobs, would increase investment in Michigan' economy in the form of sales at brick-and-mortar retail outlets by as much as $126 million per year and would save the state as much as $141.5 million in otherwise lost sales tax revenue from electronic remote sales in 2012 alone.

The Michigan Main Street Leadership Council will provide an organized voice in Lansing for retailers from across Michigan who last year formed the Michigan Alliance for Main Street Fairness, a coalition of hundreds of job makers calling for common-sense updates to Michigan's tax system to ensure there is a level playing field for both small businesses and online-only retailers concerning the collection of sales taxes. More information about the coalition can be found at www.standwithmainstreet.com/michigan.

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