If Michigan wants to stay in compliance with the multi-state streamline sales tax agreement, the Michigan Legislature needs to make some housekeeping changes to both the Sales Tax Act and the Use Tax Act.  Technically, Michigan should have updated its laws by before 2008 if it wanted to stay in compliance with the multi-state compact created to make it easier for Treasury to collect the sales taxes including taxes on Internet purchases.

Roughly half of the states in the United States are part of the streamline sales tax coalition, a collection of states that are banding together in the hopes the United States Congress changes federal laws that would make it easier for states to collect sales taxes on Internet purchases.  Michigan joined the coalition in 2001.  Michigan collects roughly $12 million from various companies voluntarily complying with the agreement, but an estimated $260 million in tax revenue is going uncollected according to Treasury estimates.

Two years ago, the national streamline sales tax group made a series of technical changes at the request of the business community.  These changes required Michigan to make corresponding changes to its tax law.  Michigan had until January 1, 2008 to make the changes, but was unable to do so.  But since no other member states have made an issue of it, Michigan's status isn't being jeopardized.

The business community is working with the legislature on some changes.  Some of the items that need to be ironed out include how automobile discounts are treated, a new definition to "bundling," exempting certain medical equipment and some changes sought by the telecommunications industry.