SOURCE: Michigan Retailers Association

Michigan Retailers Association

April 21, 2010 16:18 ET

Michigan Retailers Association: Lawmakers Urged to Reject 'New Tax' on Retailers

LANSING, MI--(Marketwire - April 21, 2010) -  The Michigan Retailers Association today said proposed legislation that amounts to a more than $17-million tax on retailers would be unfair and further damage the state's economy.

Testifying before the House Tax Policy Committee, President and CEO James P. Hallan, said, "Surely, this committee does not need another reminder that retailers have been fighting for their lives in this economy. Many have closed their doors, including family-owned businesses that have operated in Michigan for nearly 100 years.

"Taking more than $17 million away from these Michigan businesses through this legislation would make an already tough situation unbearable and result in the loss of more businesses, jobs and tax revenue."

House Bills 5421 and 5422 would cut by 20 percent the collection allowance retailers receive to offset their costs of collecting sales taxes and remitting them to the state treasury. The collection allowance is "payment for services rendered," Hallan explained, and reducing the allowance would be unfair unless the state cut every provider of state services.

In addition, House Bills 5417 and 5418 would cut retailers' sales tax deduction on bad debt.

"Here's a situation," Hallan said, "where a retailer has sent the sales tax from a 'purchase' to the state, then never gets paid by the consumer, making it a bad debt. This legislation would say the retailer could deduct only 80 percent of that sales tax. It would amount to the state taxing the retailer on a sale that never occurred -- a tax on thin air."

"These proposals amount to nothing less than a new tax on the retail business community, pure and simple," Hallan added. "They are unfair, unwise and will cause further damage to Michigan's fragile economy."

The Michigan Retailers Association is the unified voice of retailing in Michigan and the nation's largest state trade association of general merchandise retailers. Its nearly 5,000 members represent some 12,000 retail stores in Michigan.

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