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MichiganSales Tax

A Complete Guide For Businesses

Automate My MichiganSales Tax Filings

State Rate
6.00%

Local Tax
no

Phone
(517) 636-6925

General requirements

Michigan is a destination-based state (sales are taxed where the buyer is located).

  • Sales tax is charged on the retail sale of tangible personal property (TPP) and certain services
  • A sales tax license is not required for wholesalers, contractors, or subcontractors

To file your sales tax return:

Rates

The Michigan state sales tax rate is 6%. No additional local, city, or county tax rates are imposed.

How food is taxed

Generally, food and food ingredients are exempt from sales and use tax, while prepared foods are subject to the 6% tax rate.

Nexus in Michigan

Business activities that establish a minimum tax connection to the state include:

  • Maintaining a physical place of business including an office, warehouse, or distribution center
  • Having employees, independent contractors, or representatives working in the state
  • Using a distributor in the state to deliver goods
  • Working with a resident of the state to share business practices or conduct activities that help establish or maintain a market in the state

Online activities that establish nexus in Michigan include:

  • Having an affiliate or referral relationship with a contractor or representative in the state
  • Making sales from an in-state referral relationship that exceed $10,000 during the prior 12 month period
  • Total cumulative gross receipts from sales to purchasers in the state exceed $50,000 during the prior 12 month period

Economic nexus in Michigan:

  • According to state law, sellers whose sales into Michigan exceed $100,000 gross revenue or 200 separate transactions during the previous calendar year are required to register with the state, collect sales tax on sales to Michigan, and remit that sales tax to the state.
  • Effective date: Oct. 1, 2018
  • For more information see this state notice.

Find out more information about nexus in Michigan.

Filing schedule

Monthly and quarterly returns are due on or before the 20th day of the month following the end of the filing period. Annual returns are due on or before February 28th.

Your filing frequency is determined by the Department of Treasury based on your estimated tax liability when you register:

  • Annual filers: If your monthly tax due is up to $62
  • Quarterly filers: If your monthly tax due is up to $1,000
  • Monthly filers: If your monthly tax due is over $1,000

Registering to collect sales tax in Michigan

To register for Michigan sales taxes, you may either complete the online registration process through Michigan Treasury Online or mail Form 518.

Online registration is authenticated within 10-15 minutes of application submission. If mailing Form 518, allow 4-6 weeks for processing.

Penalties

Penalties are 5% of the total unpaid tax due for the first two months. After two months, 5% of the unpaid tax amount is assessed each month. The maximum late penalty is equal to 25% of the unpaid tax owed.

Interest is calculated by multiplying the unpaid tax owed by the current interest rate.

We try our best to keep these guides up-to-date. If any of this information is no longer accurate, or if you'd like us to add something new, please email corrections and suggestions to support@lumatax.com. We love hearing feedback!