Sales and Use Tax Information for Remote Sellers
For decades, U.S. Supreme Court precedent required an out-of-state (or remote) seller to have physical presence in a state before that state could require the seller to collect or pay sales tax on sales to purchasers in that state. However, on June 21, 2018, the U.S. Supreme Court overturned that precedent in South Dakota v. Wayfair and held that physical presence is no longer required. Specifically, the Court concluded that South Dakota’s law, which requires the collection and payment of sales tax if the seller had sales exceeding $100,000 or more than 200 transactions with South Dakota purchasers in the prior calendar year, is constitutional. In other words, the Court upheld “economic presence” nexus for sales tax.
Consistent with Wayfair, effective after September 30, 2018, Treasury will require remote sellers with sales exceeding $100,000 to – or more than 200 transactions with – purchasers in Michigan in the previous calendar year to pay sales tax. Details of this policy change and the nexus standard for remote sellers are published in Revenue Administrative Bulletin 2018-16.
Also, if FAQs or other guidance on Treasury's website conflict with this new economic presence nexus standard, it will be updated soon. Please check back often for updates.
- Notice to Remote Sellers Regarding Sales Tax and South Dakota v Wayfair
- Revenue Administrative Bulletin 2018-16
- South Dakota v. Wayfair
- Remote Seller Sales Tax Frequently Asked Questions
- Treasury’s Sales and Use Tax page
- New Business Registration
- Streamlined Sales and Use Tax Project
- Contact Treasury