Ultimate Michigan Sales Tax Guide

Struggling with sales tax filing?

Don’t worry — our detailed guide will simplify Michigan sales tax for you.

We'll explain how to determine Michigan sales tax rates. We'll also cover key topics such as collection methods and filing frequencies.

And that’s not all.

We'll also introduce an exceptional sales tax solution to help you maintain compliance throughout your entire sales tax process in Michigan.

Michigan Sales Tax Rate Range 2024

Michigan in the US, has a statewide sales tax rate of 6.000%. Since it doesn’t impose any local sales taxes, this tax rate applies to all Michigan cities and counties.

For instance, Saginaw of Saginaw County and Rockwood of Wayne County both have a sales tax rate of 6.000%.

Next, let’s find out how to collect sales tax in Michigan.

Collecting Michigan Sales Tax from Customers

Let’s explore how you can collect Michigan state sales tax.

Do I Have to Collect Michigan Sales Tax from Customers?

Retailers who meet these two requirements are required to collect sales tax in Michigan: 

• You have a sales tax nexus in Michigan.
• You sell taxable products or services in Michigan.

What Creates a Sales Tax Nexus in Michigan?

Any retailer making retail sales in Michigan is required to collect sales tax. Factors that create nexus include:

• Economic Nexus: Businesses that make $100,000 or more than 200 transactions in a calendar year.
• Physical Location: Businesses that have an office, warehouse, or storage inventory in the state.
• Employee Location: Businesses that have an employee in the state.
• Fundraising Events: Businesses that hold more than two fundraising events in a year need to register for sales tax. 

Learn more about the sales tax nexus and when you’re required to collect sales tax here.

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.

Read more about the marketplace facilitator sales tax law.

Taxable Products in Michigan

Most tangible personal property and services like clothing and automotive services are taxable in Michigan.

It also imposes a reduced state sales tax rate of 4.000% on the sale of electricity, natural or artificial gas, and home heating fuels for residential use.

However, Michigan doesn’t impose taxes on basic necessities like most medical supplies, food, and beverages.

Here’s a detailed look at the items taxed in Michigan: 

Are Groceries Taxable in Michigan? 

No. Grocery items are non-taxable in Michigan. 

Is Clothing Taxable in Michigan?

Yes, clothing is taxable in Michigan. 

Are Digital Products Taxable in Michigan?

No, digital products have a sales tax exemption in Michigan. 

Is Software-as-a-Service (SaaS) Taxable in Michigan?

No, SaaS is non-taxable in Michigan.

Are Services Taxable in Michigan?

Services are generally not taxable in Michigan, except when they are combined with the sale of tangible personal property. 

In such cases, Michigan looks at “the predominant nature of the transaction.” This means if the transaction is mostly a service where providing the product is not the primary result, then it is non-taxable. 

But if the transaction is the sale of a taxable item where the service is tangential, then it’s taxable. 

We recommend contacting the Michigan Department of Treasury if you have any specific questions about the taxable sales and services in the state.

Tax-exempt Items

A few tax-exempt items in Michigan are:

• Digital goods
• Sales of drugs for human use that are legally dispensed by prescription.
• Over-the-counter drugs for human use that are legally dispensed by prescription.
• Food or food ingredients (except prepared food for immediate human consumption).
• Food or tangible personal property purchased under the federal food stamp program.
• Live animals purchased with the intent to be slaughtered for human consumption.
• Food or drink heated or cooled by artificial means to an average temperature above 75 degrees F or below 65 degrees F before sale and sold from a vending machine. A few exceptions are milk and non-alcoholic beverages.

But to collect sales tax, you need a seller’s tax permit. Let's explore how you can get one.

How to Register for a Michigan Seller's Permit

You can register for a sales tax permit at the Michigan Department of Treasury.

Explore how to register for a sales tax permit in every US state.

Do I Need to Renew My Michigan Sales Tax License? 

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. In such cases, the Michigan Department of Treasury may communicate with you.

Do I Need a Michigan Sales Tax License if I’m Only A Wholesaler? 

Since wholesalers buy for resale and don’t make any retail sales, they don’t need to register for sales tax. 

Wholesalers who claim an exemption should provide a written statement that indicates they are purchasing for "resale at wholesale."

Do I Need A Michigan Seller's Permit if I Only Sell Temporarily in the State?

Yes. 

But if you only make sales at two or fewer events in Michigan in a year, you can file a Concessionaire’s Sales Tax Return (Form 5089) instead of registering for a Michigan sales tax permit. 

How to Collect Sales Tax in Michigan

As Michigan has just one statewide sales tax rate, anyone selling to a buyer in Michigan should apply that single 6% rate to the transaction.

Find the sales tax rates of your specific Michigan city here.

Should You Collect Sales Tax on Shipping Charges in Michigan?

Yes. Shipping charges are subject to sales tax in Michigan. 

Find out more about sales tax on shipping in every US state.

How to File and Pay Sales Tax in Michigan

There are multiple ways to file and pay sales tax in Michigan:

• File and pay online: You can file and pay sales tax at Michigan Treasury Online.
• File and pay by mail: Although Michigan recommends filing by mail, you can also fill out a paper sales tax return and file via mail. Make sure to fill out the correct form based on your Michigan filing frequency.
• Let Zamp handle your Michigan sales tax filing and remittance so you never have to look at a sales tax return again! 

Explore how you can file and pay sales tax in other US states.

FAQs on Paying and Filing Michigan Sales Tax

Here are the answers to some of the most common questions on sales tax in Michigan:

What Is Use Tax?

You have to pay use tax if you buy taxable items via the Internet, mail, or phone from out-of-state retailers who didn’t collect sales tax from you. This also includes a few services like telecommunications and hotel or motel accommodations.

The use tax is the same as the sales tax in the state — 6.000%.

I Didn’t Collect any Michigan Sales Tax During 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. 

Can I Get a Discount on My Michigan Sales Tax?

Michigan does offer discounts for timely payments and filings of sales tax. The discount is usually calculated according to the filing frequency:

A. Monthly Filer

• If the tax liability is less than $9, calculate the discount by multiplying the tax by 2/3 (0.6667).
• If tax is $9 to $1,200 and paid by the 12th of the month, you’ll get a $6 discount. Or, you’ll get $9 for $1,800 that’s paid by the 20th.
• If the tax is more than $1,200 and paid by the 12th of the month, calculate the discount using the formula (Tax x 0.6667 x 0.0075). The maximum discount is $20,000 for the tax period.
• If the tax is more than $1,800 and paid by the 20th, calculate the discount using this formula (Tax x 0.6667 x 0.005). The maximum discount is $15,000 for the tax period.

B. Quarterly Filer

• If the tax is less than $27, calculate the discount by multiplying the tax by 2/3 (0.6667).
• If tax is $27 to $3,600 and paid by the 12th, you get a discount of $18. You’ll get a $27 discount for $5,400 that’s paid by the 20th of the month.
• If the tax liability is more than $3,600 and paid by the 12th, calculate the discount using the formula (Tax x 0.6667 x 0.0075). The maximum discount is $20,000 for the tax period.
• If the tax is more than $5,400 and paid by the 20th, calculate the discount using the formula (Tax x 0.6667 x 0.005). The maximum discount is $15,000 for the tax period.

C. Accelerated Filer 

If the tax is paid by the 20th of the month, calculate the discount using the formula (Tax x 0.6667 x 0.005). No maximum discount applies.

What Is the Penalty for Filing and/or Paying Michigan Sales Tax Late?

The penalty for failure to file and pay sales tax in Michigan is 5% of the tax due if filed within two months. However, if you file after two months, the penalty increases by 5% — with a maximum penalty of 25%.

Can I Get an Extension on Filing My Michigan Sales Tax Return? 

Michigan only offers an extension to file sales tax — not for paying sales tax. 

To request an extension, send the payment of your remaining estimated tax to the Treasury with a copy of your federal extension (U.S. Form 4868) on or before the original due date of your return. 

However, if you don’t have a federal extension, file an Application for Extension of Time to File Michigan Tax Returns Form along with your payment. 

Can I Amend a Michigan Sales Tax Return? 

Yes. You can amend your Michigan sales tax return at Michigan Treasury Online or fill out the “Sales, Use and Withholding Taxes Amended Monthly/Quarterly Return.” 

How Often Do I Need to File and Pay Sales Tax in Michigan?

How often a state requires you to file sales and use tax generally depends on your sales volume in the state.

If your sales tax filing due date falls on a weekend or holiday, it’s due the next business day.

Michigan quarterly sales tax filing due dates:

Let The Experts Handle Your Michigan Sales Taxes

Does dealing with sales tax take the wind out of your sails?

Well, that’s why you need Zamp.

Zamp offers a top-tier solution that ensures precise tax calculations and offers one-click options for registrations and filings for a streamlined sales tax experience. With Zamp handling your tax concerns efficiently, you can focus all your newfound energy and time on your business.

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