Use tax: definitions; definition of marketplace facilitators; expand. Amends secs. 5 & 5c of 1937 PA 94 (MCL 205.95 & 205.95c).
Senate Bill 965 amends Michigan’s Use Tax Act to update registration and collection rules, with a major focus on marketplace facilitators. The bill requires a marketplace facilitator with nexus in Michigan to collect and remit use tax on taxable sales it makes or facilitates for marketplace sellers, even if the individual marketplace seller does not have nexus in the state. It also makes the facilitator the taxpayer for those transactions, requires reporting of direct and facilitated sales in a department-prescribed manner, and sets out when the facilitator or seller is relieved of liability if incorrect information or duplicate payment issues arise.
The bill also revises existing registration and administrative provisions in Section 5. It preserves the rule that sellers with a sales tax license do not need separate registration under the Use Tax Act, clarifies registration and filing requirements for corporations, and retains special rules for lessors of tangible personal property, including aircraft. In addition, it confirms that sellers registered under the Streamlined Sales and Use Tax Agreement are not required to register again solely because of that agreement.
The bill would expand and clarify the state’s use tax collection framework by expressly bringing marketplace facilitators into the tax collection and remittance system. It would shift compliance responsibility for facilitated sales to the marketplace facilitator, limit audits of marketplace sellers for those transactions, and bar class actions against facilitators over alleged overcollection of use tax while preserving individual refund rights. The measure would also update statutory references and administrative procedures tied to corporate registration and dissolution, affecting the Department of Treasury and businesses that sell through online or other marketplace platforms.
No committee transcripts or recorded votes were provided, so there is no direct evidence of legislative debate or formal support/opposition in the materials supplied. Based on the bill text, the measure appears to be a technical but significant tax administration update aimed at aligning Michigan law with modern e-commerce practices and clarifying who is responsible for collecting tax on marketplace sales.
The main policy issue is the shift of tax collection responsibility from individual marketplace sellers to marketplace facilitators, which may be viewed as simplifying compliance for the state and sellers but increasing obligations for platform operators. Another potential point of contention is the liability framework: the bill limits audits of marketplace sellers, provides relief for facilitators when they rely on bad seller information, and bars class actions over overcollected use tax, which could draw concern from purchasers or consumer advocates even though individual refund claims remain available. The bill also excludes certain lodging and telecommunications transactions from the marketplace facilitator definition, which may reflect industry-specific carveouts.