Alerts and Updates

State and Local Taxes Update for Michigan and Illinois

January 24, 2008

Michigan Business Tax

Internet Sellers Under Fire in Michigan

In REVENUE ADMINISTRATIVE BULLETIN 2007-6, the Michigan Department of Treasury has ruled that a retailer merely maintaining a web site outside of Michigan that Michigan customers can access to place orders is considered "actively soliciting sales in Michigan" and potentially is subject to the Michigan Business Tax.

Illinois Income Tax

Sellers of Services Beware

Under PA 95-0707, effective for tax years ending on or after December 31, 2008, services are no longer apportioned in Illinois based on cost of performance. Most services will now be sourced for Illinois Income Tax purposes based on receipt location by the customer. A throw-out rule is also instituted for services received in states in which the service provided does not have nexus.

For Further Information

If you would like more information about either of the above, please contact Stanley R. Kaminski, any other member of the State and Local Tax Practice Group, or the lawyer in the firm with whom you are regularly in contact.

As required by United States Treasury Regulations, you should be aware that this communication is not intended by the sender to be used, and it cannot be used, for the purpose of avoiding penalties under United States federal tax laws.

Disclaimer: This Alert has been prepared and published for informational purposes only and is not offered, nor should be construed, as legal advice. For more information, please see the firm's full disclaimer.