The Department of Treasury has announced for transactions occurring on and after Oct. 1, 2015, out-of-state retailers are required to remit sales or use tax on sales into Michigan if the seller has nexus under affiliate and click-through nexus requirements.
Effective Oct. 1, 2015, a seller that sells tangible personal property to a purchaser in Michigan is presumed to be engaged in the business of making sales at retail in Michigan if the seller or a person (including an affiliated person) other than a common carrier, engages in or performs any of the following activities in Michigan:
"Affiliated person" means either of the following: (1) any person that is a part of the same controlled group of corporations as the seller; or (2) any other person that bears the same ownership relationship to the seller as a corporation that is a member of the same controlled group of corporations. A "controlled group of corporations" means that term as defined in IRC § 1563(a).
The "affiliate" presumption can be rebutted by a demonstration that a seller's or person's activities in Michigan are not significantly associated with the seller's ability to establish or maintain a market in Michigan for the seller's sales of tangible personal property to purchasers in Michigan.
The click-through provision states that a seller is presumed to be engaged in business in Michigan if the seller enters into an agreement with one or more residents under which the resident, for a commission or other consideration, directly or indirectly, refers potential customers, by a link on an Internet website, in-person oral presentation, or otherwise, to the seller, if both of the following conditions are satisfied:
An agreement under which a seller buys advertisements from a person in Michigan, to be delivered through television, radio, print, the Internet, or any other medium is not an agreement described in this presumption unless the advertisement revenue paid to the person in Michigan consists of commissions or other consideration that is based upon completed sales of tangible personal property.
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