Reviewing the Michigan Sales Tax Nexus

Alexander Dunn
October 30, 2020

When the South Dakota v. Wayfair, Inc. decision took place, nearly every state started to adopt to new sales tax nexus requirements, including Michigan. The state enacted Revenue Administrative Bulletin 2018-16 (RAB 2018-16), which addresses economic nexus and how Michigan sales and use tax nexus standards changed. We have outlined several of the major points below.

Enforcement date:
October 1, 2018.

Sales/transactions threshold:
$100,000 or 200 transactions.

Measurement period:
Threshold applies to the previous calendar year.

Included transactions/sales:
Retail sales of tangible personal property delivered into the state.

When You Need to Register Once You Exceed the Threshold:
Next transaction (state doesn’t specify)

Summary: A remote seller has nexus with Michigan and is required to report and pay sales or use tax if, in the previous calendar year, the remote seller made over $100,000 of sales to, or more than 200 transactions with, Michigan customers.

A marketplace facilitator or marketplace seller will have economic presence in Michigan and be required to report and pay sales or use tax if, in the previous calendar year, it has over $100,000 in sales to, or more than 200 transactions with, Michigan customers.

While Michigan very closely adopted the same standards as set in the Wayfair decision, it is still important that remote sellers and marketplace facilitators are aware of any variations and how the state may continue to adapt and make changes to its economic nexus.

Michigan Sales Tax Resources: For more information on the Michigan sales tax nexus, reach out to our team. Additionally, be sure to review our interactive sales map nexus to see real-time updates on how other states are making changes.

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