Sales tax: other; deduction or exclusion and audit of qualified delivery network sales; provide for. Amends sec. 2d of 1933 PA 167 (MCL 205.52d).
Summary
SB 229 amends Michigan’s General Sales Tax Act to clarify and expand the sales tax responsibilities of marketplace facilitators, including online platforms and similar intermediaries that list products, collect customer payments, and transmit those payments to marketplace sellers. The bill requires marketplace facilitators to remit sales tax on all taxable sales they make or facilitate to Michigan purchasers, even when the underlying marketplace seller does not have nexus with the state. It also requires facilitators to report both direct and facilitated sales in a form prescribed by the Department of Treasury.
The bill further limits class-action lawsuits against marketplace facilitators over alleged overpayment of sales tax on facilitated sales, while preserving individual refund rights under existing law. It assigns audit responsibility primarily to the marketplace facilitator rather than the marketplace seller for facilitated sales, and it provides liability relief when tax errors result from incorrect or incomplete information supplied by the seller. The bill also creates specific rules for “qualified delivery network sales,” allowing a delivery network company to deduct or exclude tax it paid to a marketplace seller under certain conditions and permitting the department to audit both the seller and the delivery network company for those transactions.
Impact
SB 229 would amend section 2d of the General Sales Tax Act, changing how Michigan administers sales tax for marketplace-facilitated transactions and delivery-network sales. It would make marketplace facilitators the primary taxpayer for facilitated retail sales, regardless of physical presence or the seller’s nexus, and would shift audit focus to the facilitator in most cases. The bill also adds statutory definitions for marketplace facilitator, marketplace seller, delivery network company, delivery network courier, delivery services, and qualified delivery network sale, which would affect tax compliance obligations for e-commerce platforms, delivery apps, and their sellers.
Sentiment
The available voting history shows strong support for the bill, with the Senate committee reporting it favorably without amendment and the full Senate passing it unanimously, 37-0. That suggests broad agreement on the need to clarify sales tax collection rules for marketplace platforms and delivery networks. No committee transcript is available here, but the vote pattern indicates little visible opposition in the recorded proceedings.
Contention
The main policy issues in the bill concern who should bear sales tax liability and audit exposure in marketplace transactions: the facilitator or the underlying seller. The bill favors placing those duties on the facilitator, while limiting seller liability unless the seller fails to provide sufficient information. Another point of potential contention is the class-action bar, which restricts collective litigation over sales tax overpayments against facilitators, though individual refund claims remain available. The special treatment of qualified delivery network sales, including a limited deduction or exclusion and dual-audit authority, is another area where delivery platforms, sellers, and tax administrators may have differing interests.