LANSING, MI--(Marketwire - Feb 11, 2013) - A general sales tax increase to fund road repairs would be devastating to Michigan's retail industry and deliver a serious blow to the state's economic recovery, Michigan Retailers Association (MRA) President and CEO James P. Hallan said today.
In a letter to all state senators, Hallan said an increase of one or two cents in the sales tax would push even more Michigan residents to the Internet to buy from out-of-state merchants that don't collect sales and use tax. Such a move would depress sales at Michigan retail businesses, eliminate jobs and deprive the state of necessary sales tax revenue.
"Michigan Retailers Association agrees that we need to fix our roads; however, a sales tax increase is not the way to do it," he wrote.
Legislation to ask voters for a sales tax increase to pay for roadwork is under consideration in the Senate. MRA supports the governor's plan that relies instead on user-based fees and taxes to repair roads, Hallan said.
Thousands of retail jobs and hundreds of millions of tax dollars have been lost already in Michigan because of the 6 percent competitive advantage enjoyed by out-of-state, online merchants that aren't required to collect sales and use tax on goods sold to Michigan consumers, he said.
"Worse, the number of lost jobs and the amount of lost tax revenues are accelerating as more consumers shop online. Adding another one or two cents to the sales tax would supercharge those damaging trends," he said.
Michigan Retailers Association represents nearly 5,000 members and their more than 15,000 stores and websites in Michigan. Retailing provides more than 850,000 jobs in Michigan.