So far, second thoughts might keep the additional burdens of doing business in Michigan at bay.
I have lost some big sales in other states because of ‘Amazon Laws’ in the past few years.
Its an amazing thing that happens when your cost of doing business in a state goes up by 10%. (Michigan will be 6%) You lose customers, they pay more, or you eat the costs. The first option is of course the worst of the three, but when profit margins range between 15-20%, 10 points represents at least HALF the profits, and can be discouraging to even attempting to sell.
California has some of the most used shipping ports, so its natural that many warehouses are located there. It also has quite a large population. Our business has historically sold more to California customers, than those in Michigan. But a few years ago, I was notified by one of my suppliers who drop ships for me in that state, that unless they had an exemption form on file for the customers, they would have to charge an additional 10% for the product to cover THEIR tax liability; CA Sales tax being 8% and an additional 25% tax for assumed mark-up.
I had a choice. I could in some cases ship product all the way here, then ship all the way back, and salvage a few pennies, OR I could simply find a supplier for similar product in other state warehouses willing to ship to California. The unnatural commerce that had to evolve (and quickly), wound up raising the cost of doing business. It raised the cost and in some cases slowed service for the customers in California who were STILL expected to report their ‘USE tax.’
Kowall and Verheulen play along with monster rent seeking bills.
Bills 4202 and 4303 are designed to do just that.
Every layer of regulation has a time cost. Never mind that (PER THE LAW) our business already collects sales tax from those who buy retail in Michigan. The big box stores want us to go through enhanced reporting requirements and spend additional time in the entire process of collecting tax as a service to the state. This form of rent seek is commonly used to suppress competition.
Kowall and Verheulen or anyone who votes for this are the enemy of the ‘small e-tailer.’
Big Box retailers have found foot soldiers willing to do bidding in HUGE rent seek.
Word on the street is that HB 4202 and HB 4203 are on the schedule for second reading today in the Michigan House of Representatives. That means it would be up for FINAL PASSAGE tomorrow. You can read below all the details about the bills. Bottom line, if they are enacted, you will be paying MORE taxes.
Please take a moment and contact your representative today. Let your opinion be known! These phone calls and emails do matter. They do affect how a representative votes.
Find your representative’s contact information here.
We will keep you posted of the progress (or lack therof) of these bills tomorrow.
House Bills 4202 (Kowall-R), and 4203 (VerHeulen-R), will impose new taxes on consumers in Michigan and will further burden online sellers, especially the mom and pop shops that operate out of a small store front office or the business owners home. They will be subjected by government to an abundance of new compliance requirements. It will stifle competition as many smaller competitors to the big guys (like Amazon) will likely be forced to downsize or worse yet, go out of business.