May 2, 2019, Introduced by Reps. Tate, Webber, Afendoulis and Yancey and referred to the Committee on Tax Policy.
A bill to amend 1937 PA 94, entitled
"Use tax act,"
(MCL 205.91 to 205.111) by adding section 5c.
THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
Sec. 5c. (1) Notwithstanding anything to the contrary in this
act, a marketplace facilitator that sells or facilitates the sale
of tangible personal property or services subject to the tax under
this act for delivery into this state is presumed to have nexus in
this state, is subject to the tax under this act, shall collect and
remit applicable use tax, and shall follow all applicable
procedures and requirements of this act, if the marketplace
facilitator makes or facilitates sales of tangible personal
property or taxable services, on its own behalf or on behalf of 1
or more marketplace sellers, or both, for delivery into this state
exceeding $100,000.00 or in 200 or more separate transactions in
the previous calendar year or the current calendar year.
(2) A marketplace facilitator that is presumed to have nexus
with this state under subsection (1) is required to collect and
remit the tax due under this act on all taxable sales made by the
marketplace facilitator or facilitated for marketplace sellers to a
purchaser in this state regardless of whether the marketplace
seller for whom sales are facilitated has registered or is required
to register under section 5 or would have been required to collect
or remit use tax had the sale not been facilitated by the
marketplace facilitator. Nothing in this section shall be construed
to interfere with the ability of a marketplace facilitator and a
marketplace seller to enter into agreements with each other
regarding the fulfillment of the requirements of this act.
(3) The department may grant a waiver from the requirements of
this section if either of the following requirements is met:
(a) A marketplace facilitator demonstrates, to the
satisfaction of the department, that substantially all of its
marketplace sellers are registered with the department under
section 5 or have a current and valid sales tax license under
section 3 of the general sales tax act, 1933 PA 167, MCL 205.53.
(b) A marketplace seller has sufficient nexus with this state
to require registration under section 5 or licensure under section
3 of the general sales tax act, 1933 PA 167, MCL 205.53, and the
department determines that collection of use tax by the marketplace
seller with regard to transactions facilitated by the marketplace
facilitator would result in the appropriate and efficient
collection of tax under this act.
(4) If the department grants a waiver under subsection (3),
the tax levied under this act on sales that are facilitated by a
marketplace facilitator for a marketplace seller must be collected
from the marketplace seller. The department shall promulgate rules
that establish the criteria for obtaining a waiver under subsection
(3), the process and procedure for a marketplace facilitator or a
marketplace seller to apply for a waiver, and the process for
notifying an affected marketplace facilitator and marketplace
seller of a waiver obtained under subsection (3).
(5) A marketplace facilitator shall report the sales it
facilitates separately from the sales made directly by the
marketplace facilitator, or affiliates of the marketplace
facilitator, to purchasers in this state by filing a separate
marketplace facilitator return on a form prescribed by the
(6) A class action shall not be brought against a marketplace
facilitator in any court of this state on behalf of purchasers
arising from or in any way related to an overpayment of use tax
collected on sales facilitated by the marketplace facilitator,
regardless of whether that claim is characterized as a tax refund
claim. Nothing in this subsection affects a purchaser's right to
seek a refund as provided under this act.
(7) Nothing in this section affects the obligation of a
purchaser to remit tax under this act, for a taxable transaction on
which a marketplace facilitator or seller does not collect and
remit tax under this act or sales tax under the general sales tax
act, 1933 PA 167, 205.51 to 205.78.
(8) Except as otherwise provided in this subsection, if a
marketplace facilitator is presumed to have nexus with this state
under subsection (1), the department shall solely audit the
marketplace facilitator for sales made by marketplace sellers that
were facilitated by the marketplace facilitator. The department
shall not audit a marketplace seller for sales facilitated by a
marketplace facilitator unless a waiver is granted under subsection
(3) and the tax levied under this act must be collected from the
marketplace seller under subsection (4) or to the extent that the
marketplace facilitator seeks relief under subsection (9).
(9) A marketplace facilitator is relieved of liability under
this section for failure to collect and remit the correct amount of
tax to the extent that the failure was due to incorrect or
insufficient information given to the marketplace facilitator by
the marketplace seller. The relief under this subsection does not
apply if the marketplace seller is an affiliate of the marketplace
(10) A marketplace facilitator is relieved of liability under
this section if the marketplace facilitator demonstrates, to the
satisfaction of the department, that the tax levied under this act
on a sale facilitated by the marketplace facilitator was paid to
the department by the marketplace seller.
(11) This section applies regardless of whether the
marketplace facilitator has a physical presence in this state.
(12) As used in this section:
(a) "Affiliate" means an affiliated person as that term is
defined in section 5a.
(b) "Marketplace facilitator" means a person that meets the
requirements of subparagraph (i), but does not include a person
described in subparagraph (ii) or (iii):
(i) A person is a marketplace facilitator if the person does
all of the following:
(A) Contracts with a marketplace seller to facilitate for
consideration, regardless of whether deducted as fees from the
transaction, the sale of the marketplace seller's products through
a physical or electronic marketplace operated by the person.
(B) Engages directly or indirectly, through 1 or more
affiliates, in transmitting or otherwise communicating the offer
and acceptance between a purchaser and the marketplace seller.
(C) Either directly or indirectly through agreements or
arrangements with third parties collects the payment from a
purchaser and transmits the payment to the marketplace seller.
(ii) Marketplace facilitator does not include a person who
operates a platform or forum that provides internet advertising
services, including listing products for sale, if the person does
not also engage directly or indirectly, through 1 or more
affiliates, in the activities described in subparagraph (i).
(iii) A person is not a marketplace facilitator with respect
to the sale of or charges for rooms, lodgings, or accommodations
described in section 3a if the rooms, lodgings, or accommodations
are provided by a hotel keeper, motel operator, or other person
that is registered under section 5 or licensed under section 3 of
the general sales tax act, 1933 PA 167, MCL 205.53, and the hotel
keeper, motel operator, or other person provides the rooms,
lodgings, or accommodations for occupancy under a brand belonging
to the hotel keeper, motel operator, or other person.
(c) "Marketplace seller" means a person that makes retail
sales through a physical or electronic marketplace operated by a
Enacting section 1. As provided in section 5 of 1846 RS 1, MCL
8.5, this amendatory act is severable.
Enacting section 2. This amendatory act takes effect 90 days
after the date it is enacted into law. An obligation to collect use
tax under this amendatory act does not apply retroactively.