Tax for buying online
Posted: 12.14.2010 at 5:17 PM
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MARQUETTE -- Every time you buy something in a Michigan store, you're charged a six percent sales tax.  But if you make purchases on the Internet and are not charged Michigan sales tax, you're still accountable for paying the tax.

They're two separate taxes that are for the same amount.  And that could be why the sales tax and the use tax are often confused.

"In Michigan we pay six percent; we're supposed to pay six percent on Internet sales, catalog sales, out of state, we're required," says tax attorney Robert Anderson.

On a Michigan tax return form, there's a completely separate line for the use tax.  That's where you're supposed to claim the taxes from all of your Internet purchases.  But sometimes the tax is already charged to you, so you'll need to keep a record of that.

"They have to keep their receipts from Internet sales and catalog sales and find out if the company collected the use tax, and if they did collect the use tax, they have no further obligation to do anything," Anderson explains.

It should be listed right on the receipt whether or not the use tax was collected.

Michigan is one of 24 states under an agreement called the Streamlined Sales Tax Project, which is a multi-state effort to simplify tax policies.  As of this summer, legislation was passed in each of those states in an attempt to make it easier to buy things on the Internet from out of state.

So what if you choose not to claim the use tax on your tax return?  Aside from the financial consequences if you were to be audited, by not claiming the taxes, you could be depriving your community of federal money.

"This is a way that we can help the state, help the county, and help the cities by making sure that we comply with these tax laws," Anderon says.

Most national chains already collect sales taxes on online orders, but there are still a few that don't.

To avoid paying the tax twice, the best way to know if you already paid it for an order is to check the invoice.