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Lawmakers want double delivery tax stopped

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(The Center Square) – A bipartisan group of Michigan state representatives want to stop local delivery drivers from paying taxes twice.

Reps. Alabas Farhat, D-Dearborn; Jimmie Wilson, D-Ypsilanti; Graham Filler, R-Duplain Township; and Jasper Martus, D-Flushing introduced HB 5745 and 5746 to eliminate a double sales tax on delivery companies like Instacart and Shipt.

Under current Michigan law, local delivery companies pay a sales tax both when buying the product from the retailer and when they deliver to the consumer. This results in the delivery company being taxed twice for one transaction.

“Our goal is to ensure fairness and stop the double taxation that hurts delivery companies,” Filler said. “By fixing this, we can support local businesses and make it easier for them to operate.”

Small, local businesses often don’t have the sales technology to account for this double tax, resulting in an unnecessary advantage toward larger corporations, lawmakers say.

The proposed bills would allow delivery network companies to deduct the sales tax they paid to retailers from their tax liabilities. The new tax policy would only apply to local, same-day deliveries, such as for groceries.

“Local businesses rely on delivery services to compete with larger companies,” Filler said. “By allowing these delivery networks to deduct the sales tax they’ve already paid, we can reduce their financial burden and help them continue supporting small businesses.”

The bills have been referred to the House Tax Policy Committee.

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