Michigan ~ Sales and Use Tax: Direct Mail Sourcing Provisions Amended to Conform With SST Agreement

Enacted Michigan legislation clarifies how a seller or purchaser of advertising and promotional direct mail collects, pays, or remits sales tax or use tax and the sourcing of other direct mail in order to conform with the Streamlined Sales and Use Tax Agreement. The enacted law repeals existing sections of the General Sales Tax Act and the Use Tax Act (Acts) regarding the obligation of a seller or purchaser of direct mail to collect, pay, or remit sales or use tax, and enacts new provisions that:

— require a seller to source the sale of advertising and promotional direct mail to the jurisdictions to which the mail was to be delivered to recipients, and pay the applicable tax, if the purchaser provided that information;

— require the purchaser to source the sale of advertising and promotional direct mail to the jurisdictions to which it was to be delivered, and pay the applicable tax, if the purchaser provided the seller with a direct payment

authorization or exemption form from the Department of Treasury;

— require a sale of advertising and promotional direct mail to be sourced as provided under the Acts, if the purchaser did not provide information about the delivery jurisdictions or provide a direct payment authorization or

an exemption form;

— require the purchaser to source the sale of other direct mail and pay the applicable tax, if the purchaser provided the seller with a direct payment authorization or exemption form;

— require a sale of other direct mail to be sourced as provided in the Acts, if the purchaser did not provide a direct payment authorization or exemption form;

— relieve the seller of any obligation to collect, pay, or remit the applicable tax in situations in which the purchaser was required to pay the tax and source the sale; and

— describe the circumstances under which the provisions apply.

Act 159 (H.B. 5132) and Act 160 (H.B. 5133), Laws 2016, effective September 6, 2016; Senate Fiscal Analysis; Senate Fiscal Agency, April 21, 2016

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