United States

Michigan: Legislature Passes Affiliate and Click-Through Nexus Bills

Jan 12, 2015
From KPMG TaxWatch

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Just before the holidays, the Michigan Legislature passed two bills (SB 659 and 658) that would establish affiliate and click-through nexus standards for sellers engaged in business in the state. If signed into law, effective October 1, 2015, a person would be presumed to be engaged in business in Michigan if he performed certain activities in conjunction with an affiliated in-state seller, including selling a similar line of products under the same or similar business name; using the same or substantially similar trademarks; service marks, or trade names; delivering, installing, assembling, or performing maintenance or repair services for the seller’s customers in the state; allowing returns of tangible personal property; having shared management, business systems, business practices, or employees; among others. The bill would also create a rebuttable presumption that a person is engaged in business in Michigan if he enters into an agreement with a Michigan resident under which the resident receives a commission or other consideration for referring potential customers by a website link, in-person oral presentation, or otherwise, provided that the seller makes at least $10,000 in sales through all such agreements and at least $50,000 in sales in Michigan through all means in the prior 12 months. The bills also set forth criteria by which the presumptions may be rebutted. Currently, these two bills are awaiting the Governor’s signature. Please contact Lindsay McAfee at 202-533-6736 with questions on Michigan’s pending affiliate and click-through nexus bills.

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The information contained herein is of a general nature and based on authorities that are subject to change. Applicability of the information to specific situations should be determined through consultation with your tax adviser.