Most tangible personal property is subject to sales tax. However, some necessities like food, clothing and medication are not taxable in some states. And sometimes states consider things like digital goods (eBooks, music, movies) and software-as-a-service (SaaS) taxable even though they can’t be touched or held.
Here’s how Michigan taxes the most commonly sales tax exempt items:
Services are generally not taxable in Michigan, except in cases where a service and the sale of tangible personal property are combined. In that case, Michigan looks at “the predominant nature of the transaction.” If the transaction is mostly a service where providing the product is not the primary result of the transaction, then it is nontaxable. But if the transaction is the sale of a taxable item where the service is tangential, then the transaction is taxable.
Yes. Michigan sales tax licenses are valid from January through December of each year. You may be required to provide more information when your license expires. Be on the lookout for a communication from the Michigan Department of Treasury.
Do I need a Michigan sales tax permit if I’m only a wholesaler?
I didn’t collect any Michigan sales tax this period. Do I still need to file a return?
Yes. You should still file a “zero” return with the state even if you didn’t collect any sales tax over the taxable period.
What is the penalty for filing and/or paying Michigan sales tax late?
The penalty for failure to both file and pay sales tax in Michigan is 5% of the tax due if filed within two months, and an additional 5% of the tax due per month if filed after two months, with a maximum penalty of 25%.
Can I get an extension on filing my Michigan sales tax return?