One of the big issues facing Michigan's legislature recently has been whether to apply state sales tax to e-commerce in the same manner as in-store retail purchases.
The state is trying to figure out how to tax whatever is purchased on the Internet as a way of protecting Michigan retailers who are collecting the 6-percent sales tax.
Michigan's state government is afraid we're all going to do all our shopping on the Internet. Not only could the state lose billions of dollars of revenue, but retailers in the state face a competitive disadvantage compared with the dot-coms that don't collect sales taxes.
About the only time no one worries is when you buy a car or boat out of state, because you have to register the vehicle and pay taxes in Michigan sooner or later.
But while we are spending all this time and energy worrying about e-commerce, we're ignoring a larger problem that has existed for decades: direct-mail catalogs.
It may well be that over the next couple of decades, e-commerce is going to be a lot of money. But right now, if you want to worry about sales taxes, then you should take a look at direct mail.
I don't know the figures, but I'll bet the merchandise that folks in Michigan buy through an 800 number or catalog is huge compared with anything the Internet will have for a decade.
When you realize there are thousands of companies shipping millions of packages to customers without worrying about collecting state sales taxes, then you realize pretty quickly what's at stake.
For years, direct-mail marketers had a valid point when they complained it was impossible for them to have any idea what to charge for sales tax, much less where to send the money.
But with the advent of the good old computer, it would be a piece of cake for any catalog company to charge us sales tax for wherever we happen to live.
Understand, again, that these folks have been lobbying for decades to make sure they don't have to collect sales taxes. They've been very successful.
But it baffles me why anyone worries about the amount of revenue the Internet is costing Michigan while they seem to be unaware of the dollars that they are ignoring from catalog sales.
I'm certainly not looking forward to paying sales taxes on my catalog purchases, but let's at least be honest, and to quote Willie Sutton, the famous bank robber: "Cause that's where the money is."
Mr. Crain is chairman of Crain Communications Inc. This article first appeared in Crain's Detroit Business.