Last week to not pay sales tax at Amazon, other sites

Attention Internet shoppers and tax cheats: This is your last week to buy stuff online and not pay any sales tax.

Michigan's new "Main Street Fairness" law goes into effect on Thursday, Oct. 1. For the first time, Internet retailers with a presence in Michigan, such as Amazon and Overstock, will be required to collect and remit the state's 6% sales tax on all purchases made by Michigan shoppers.

But because the law applies to just online retailers with an actual physical presence in Michigan, many out-of-state niche stores can still skip the sales tax when ringing up Michiganders' virtual shopping carts.

Amazon has a fullfillment center in Brownstown Township and has 100 employees working in downtown Detroit.

The bipartisan legislation passed the state legislature late last year with a strong push from traditional bricks-and-mortar retailers, who have complained for years about Internet sales unfairly undermining their business.

This is not a new tax. People have always been required to pay sales tax for goods they buy online -- even if the retailer didn't tack on the tax at checkout. The proper way to obey the law has been self-reporting the sales tax that wasn't charged, then paying it with one's annual income tax returns.

But in reality very few Internet shoppers will pay sales tax unless compelled to upfront.

Only 117,000 people reported untaxed online purchases on their 2013 tax returns, paying $6.7 million in sales tax. State officials estimate that represented only 2.5% of the total amount due.

The new law is expected to net $50 million to $60 million a year for the state's coffers.

Contact JC Reindl: 313-222-6631 or jcreindl@freepress.com. Follow him on Twitter @JCReindl.