Total Range for 2025
| Base state sales tax rate | 6% | Base state sales tax rate | Base state sales tax rate | Base state sales tax rate | Base state sales tax rate |
| Local rate range | N/A | Base state sales tax rate | Base state sales tax rate | Base state sales tax rate | Base state sales tax rate |
| Total rate range | 6% | Base state sales tax rate | Base state sales tax rate | Base state sales tax rate | Base state sales tax rate |
| Economic sales nexus threshold | Base state sales tax rate | Base state sales tax rate | Base state sales tax rate | Base state sales tax rate | |
| Transactions threshold | N/A | Base state sales tax rate | Base state sales tax rate | Base state sales tax rate | Base state sales tax rate |
| Sales tax return filing due date | 20th of following month | Base state sales tax rate | Base state sales tax rate | Base state sales tax rate | Base state sales tax rate |
The base state sales tax rate in Michigan is 6% and since there is no local rate range the total sales tax range is just 6%.
How to calculate your sales tax rate
Use our online sales tax calculator to determine the combined state and local sales tax rate for each location where you have a physical or economic nexus. Just enter your state and ZIP code to get your sales tax rate.
Example of using the sales tax rate in a tax calculation:
Let’s say you buy a new pair of running shoes at a store in Michigan. The shoes themselves cost $80 (before tax).
Since Michigan has a flat sales tax rate of 6% for most taxable goods, and running shoes are generally taxable, here’s how to calculate the sales tax:
- Multiply the sales tax rate by the original price: 6% (sales tax) x $80 (price of shoes) = $4.80 (sales tax amount)
- Add the sales tax to the original price to find the final price: $4.80 (sales tax) + $80 (original price) = $84.80 (final price)
Nexus: Why do you need to collect sales tax in Michigan?
If you’re selling goods and services in Michigan then sales tax might apply! To determine your obligation, you need to understand “nexus,” which ties businesses to states for tax purposes.
Two types of nexus exist:
- Physical Nexus: Having a physical presence, like an office, warehouse, or employees in Michigan, triggers this type. If you do, you likely need to collect sales tax.
- Economic Nexus: This kicks in when your sales within Michigan exceed a certain economic threshold. Even without a physical presence, surpassing this threshold requires collecting sales tax.
In Michigan, there is also a transaction threshold of 200, which means that even if your sales aren’t over $100,000 if you’ve sold more than 200 items then you still need to pay sales tax.
Services
- Generally, services in Michigan are not taxable.
- However, if your service results in creating or manufacturing a tangible good, there might be sales tax implications on the final product.
Goods
- Tangible personal property (goods) are generally taxable in Michigan with a few exceptions.
- Common exempt goods include vehicles sold to relatives, some industrial machinery, and some agricultural equipment.
Freight/Shipping
- Michigan applies sales tax to shipping costs if the good being shipped is taxable.
- In other words, tax on shipping follows the tax status of the good itself.
Clothing
- All clothing is subject to sales tax
Electronics
- Electronics are taxable in Michigan
SaaS
- SaaS is not taxable unless it is downloaded.
Digital Products
- Digital goods that are not classified as “prewritten computer software” are not subject to sales or use tax, whether downloaded, streamed, or accessed via subscription.
- However, digital games, as they are considered software, are generally taxable if downloaded or installed on electronic devices.
Software
- Generally, pre-written software is considered tangible personal property and therefore taxable.
- However, custom software development services might be exempt.
How to register for sales tax in Michigan
You can register for a sales tax permit in Michigan online through the Michigan Department of Treasury’s Michigan Business One Stop Website https://www.michigan.gov/taxes/business-taxes/sales-use-tax.
Here’s what you’ll need to have on hand when you register:
- Personal and business identification information (your name, Social Security number or Employer Identification Number (EIN) for your business)
- Major business activity (what your business does)
- Business entity type (sole proprietorship, LLC, etc.)
- Locations of your business offices or other places of business
- Projected monthly sales and taxable sales
- Products or services you will be selling
Once you register and your application is approved, you’ll receive your Michigan sales tax ID and filing frequency in the mail.
How to collect sales tax in Michigan
Collecting sales tax in Michigan involves three main steps:
- Charge the Correct Rate:
- Michigan has a statewide flat sales tax rate of 6% for most taxable goods.
- There are no additional local sales taxes.
- Make sure to check if your product or service falls under any tax exemptions (mentioned previously).
- Collect the Tax:
- During checkout, add the 6% sales tax to the sales price of taxable items for customers located in Michigan.
- Your point-of-sale system can often automate this calculation and collection.
- Record the Transaction:
- Keep good records of all your sales transactions, including the amount of sales tax collected for each sale.
- This will be crucial when you file your sales tax return
How to get a sales tax permit/license in Michigan?
After registering your business, apply for a sales tax license with the Michigan Department of Treasury. This can be done online through the Michigan Treasury Online (MTO) system. During the application process, you’ll need to provide details about your business activities and your estimated sales.
When are Michigan’s sales tax returns due?
The due dates for Michigan sales tax returns depend on your assigned filing frequency:
- Monthly filers: 20th day of the following month
- Quarterly filers: 20th day of the month following the end of the quarter
- Annual filers: February 28th following the year the taxes were collected
Is anyone exempt from sales tax in Michigan?
Yes, there are certain categories of people and organizations exempt from paying sales tax in Michigan. Here’s a breakdown:
- Government Agencies: Federal, state, and local government entities don’t typically pay sales tax on purchases they make for official government business.
- Non-Profit Organizations: Qualifying non-profit organizations with a valid exemption certificate issued by the Michigan Department of Treasury are exempt from sales tax on purchases related to their exempt activities. This typically applies to 501(c)(3) organizations like charities and religious organizations.
- Certain Businesses: Businesses that purchase goods for resale (wholesale) are exempt from sales tax, provided they have a valid resale certificate. This avoids double taxation as they’ll eventually collect sales tax when they sell the item to their customers.
- Agricultural Production: Farmers and agricultural producers may be exempt from sales tax on certain items used in agricultural production, such as seeds, fertilizer, and machinery.
- Other Exemptions: There are other specific exemptions for certain goods and services, such as groceries, prescription drugs, and some manufacturing equipment.
Do I Have to Collect Sales Tax from Michigan Customers if I Sell on Amazon, Walmart, Ebay, or Etsy?
No.
Michigan has a marketplace facilitator law, which means marketplaces like Amazon and eBay are required to collect sales tax on behalf of 3rd party sellers on their platforms.
If you have a sales tax nexus in Michigan, remember that you are still required to collect sales tax on your other non-marketplace Michigan sales.
