December 17, 2024
Michigan Sales Tax Guide 2025: A Step-by-Step Guide for Businesses
Table of contents
Michigan Sales Tax: 2025 Overview
Sales tax in Michigan is a 6% statewide rate in 2025, with no local taxes, providing a uniform rate for all transactions. Michigan participates in the Streamlined Sales Tax initiative (SSUTA), making compliance easier for remote sellers.
Known for its exemptions on groceries and prescription medications, Michigan’s simple and predictable tax system benefits businesses operating across the state.
Michigan Sales Tax Due Date
In Michigan, the due dates for paying sales taxes depend on your assigned filing frequency, which is determined by your total taxable sales and tax liability.
Filing Frequency | Criteria | Due Date |
|---|---|---|
Monthly | Required for businesses collecting $108,000 or more annually in sales tax. | Due on the 20th of the following month. |
Quarterly | For businesses collecting less than $108,000 annually but more than $9,000. | Due on the 20th of the month following the quarter (e.g., April 20 for Q1). |
Annually | For businesses collecting $9,000 or less annually in sales tax. | Due on February 28 of the following year. |
Key Notes
If the due date falls on a weekend or holiday, payments are typically due on the next business day.
Late filings or payments may result in penalties and interest, so timely compliance is essential.
Payments and filings can be completed through the Michigan Treasury Online (MTO) Portal.
Michigan State Sales Tax Rate in 2025
Michigan imposes a statewide sales tax of 6%, with no additional local sales taxes, ensuring a uniform rate across the state.
Tax Type | Rate | Description |
|---|---|---|
State Sales Tax | 6% | Applies to most retail sales of tangible personal property and certain services. |
Local Sales Tax | None | Michigan does not impose any additional local sales taxes. |
Notes
Michigan exempts essential items such as groceries and prescription medications from sales tax.
The 6% rate applies uniformly to all taxable transactions throughout the state.
2025 Michigan Local Sales Tax Rates Table
Michigan imposes a statewide sales tax of 6%, with no additional local sales taxes, ensuring a uniform rate across the state.
City/Town | Local Sales Tax Rate | Total Sales Tax Rate |
|---|---|---|
Ann Arbor | None | 6.0% |
Detroit | None | 6.0% |
Flint | None | 6.0% |
Grand Rapids | None | 6.0% |
Kalamazoo | None | 6.0% |
Lansing | None | 6.0% |
Rochester Hills | None | 6.0% |
Saginaw | None | 6.0% |
Troy | None | 6.0% |
Notes
Michigan does not impose any local sales taxes, ensuring a flat 6% sales tax rate statewide.
Essential items such as groceries and prescription medications are exempt from sales tax.
For additional details, visit the Michigan Department of Treasury.
CQ For city-based tax rates in Michigan, visit our Michigan Local Sales Tax Directory and search for your city.
Michigan Sales Tax Calculator Example with Customers in Multiple Locations
An online retailer based in Ohio establishes economic nexus in Michigan by exceeding $100,000 in annual sales or 200 transactions, requiring them to collect and remit sales tax for purchases made by Michigan residents. The retailer makes sales to customers across the state, where a uniform statewide sales tax rate of 6% applies.
Detail | Description |
|---|---|
Business | Online retailer based in Ohio with economic nexus in Michigan. |
Customer Purchases | Customer A in Detroit $1,200 total, $800 taxable, $400 exempt (e.g., groceries or medications). Customer B in Grand Rapids $900 total, $600 taxable, $300 exempt. Customer C in Ann Arbor $500 total, $400 taxable, $100 exempt. |
Customer Locations | Detroit, Grand Rapids, Ann Arbor All subject to the uniform 6% statewide sales tax rate. |
Michigan Sales Tax Calculations
Customer | Taxable Amount | Total Tax Rate | Total Tax Due |
|---|---|---|---|
Customer A | $800 | $800 × 6% = $48.00 | $48.00 |
Customer B | $600 | $600 × 6% = $36.00 | $36.00 |
Customer C | $400 | $400 × 6% = $24.00 | $24.00 |
Total Sales Tax Due in Michigan
$48.00 (Customer A) + $36.00 (Customer B) + $24.00 (Customer C) = $108.00
Key Considerations for Businesses
Location Accuracy: Michigan has a uniform tax rate statewide, but businesses must still ensure accurate tracking of taxable transactions.
Exemption Management: Groceries, prescription medications, and certain medical devices are exempt from Michigan sales tax. Businesses must document these exemptions properly.
Tax Reporting: Accurately monitor and report all taxable and exempt sales for timely filing and remittance through the Michigan Treasury Online (MTO) portal.
Kintsugi Intelligence automates location-based tax rate application, exemption management, and accurate reporting across all your one-click integrations to ERP, HR, and eCommerce systems like Shopify, BigCommerce, Amazon, Quickbooks, and Rippling.
Is there a Michigan SaaS sales tax?
Yes, Michigan imposes sales tax on Software as a Service (SaaS) if it is classified as prewritten software.
Category | Details | Examples |
|---|---|---|
Taxable SaaS | SaaS is taxable under Michigan’s 6% state sales tax if it is prewritten software provided electronically. | Cloud-based accounting software, CRM tools. |
Non-Taxable SaaS | Custom software or SaaS that is primarily considered a service may be exempt, depending on the transaction's structure. | Custom software solutions. |
Requirements for Businesses | SaaS providers with nexus in Michigan must collect and remit sales tax for taxable transactions. | Out-of-state providers meeting nexus thresholds. |
Additional Considerations
Taxability depends on whether the SaaS product is considered prewritten or custom software.
Businesses can streamline compliance by getting started with Kintsugi for sales tax automation, ensuring accurate tax calculations and filings.
For further guidance, consult the Michigan Department of Treasury or a tax professional.
Is there sales tax on clothing in Michigan?
Yes, Michigan imposes sales tax on clothing, but the rules are straightforward with no specific exemptions:
Category | Details |
|---|---|
Taxable Clothing | All clothing and footwear are subject to Michigan’s 6% state sales tax, with no special exemptions or reduced rates. |
No Exemptions | Michigan does not exempt clothing from sales tax, regardless of price or type. |
No Sales Tax Holiday | Unlike some states, Michigan does not offer a sales tax holiday for clothing purchases. |
CQ For more details on sales tax on clothing in Michigan, read Kintsugi's guide: Does Michigan Have Sales Tax on Clothing in 2025: A Guide for Businesses.
FAQs
What is the Michigan sales tax rate?
Michigan imposes a 6% statewide sales tax with no additional local sales taxes, ensuring consistent features such as rate and regulations statewide.
How do you calculate Michigan sales tax?
Multiply the taxable amount by the 6% statewide rate. Exemptions, such as for groceries and prescription medications, must be applied appropriately.
Sales Tax Nexus in Michigan
Sales tax nexus in Michigan establishes a business's obligation to collect and remit sales tax, triggered by physical presence, economic activity, or relationships with in-state entities.
Type of Nexus | Description | Threshold/Criteria |
|---|---|---|
Physical Nexus | Created by having a physical presence in Michigan, such as a location, employees, or inventory. | Office, warehouse, storefront, or employees operating in Michigan. |
Economic Nexus | Triggered by making substantial sales into Michigan, even without a physical presence. | More than $100,000 in gross sales or 200 separate transactions in the current or previous year. |
Affiliate Nexus | Created through relationships with in-state businesses that help facilitate sales. | A Michigan-based affiliate promotes or sells products for the out-of-state retailer. |
Marketplace Nexus | Applies to sales made through marketplace facilitators operating in Michigan. | Facilitators must collect and remit sales tax on behalf of sellers. |
Inventory Nexus | Triggered by storing inventory in Michigan, even if through a third party (e.g., warehouses). | Any physical inventory located in Michigan. |
Employee or Agent Nexus | Having employees, independent contractors, or agents perform services in Michigan. | Sales or service activities conducted by representatives in Michigan. |
Notes
Michigan uses both physical presence and economic presence to determine sales tax nexus.
Businesses with nexus in Michigan must register for a sales tax permit and collect sales tax on taxable sales.
Marketplace facilitators are responsible for collecting and remitting sales tax for third-party sales made through their platforms.
FAQs
What is the sales tax nexus in Michigan?
Sales tax nexus in Michigan is established through physical presence or economic nexus, triggered by exceeding $100,000 in annual sales or 200 transactions in the state.
Michigan Sales Tax Exemptions in 2025
In 2025, Michigan maintains its 6% state sales tax, with exemptions for groceries, prescription medications, and certain medical devices.
What is a Michigan state tax-exempt certificate?
A Michigan sales tax exemption certificate, also known as Form 3372, is a document that allows eligible buyers to make tax-exempt purchases in Michigan. It certifies that the buyer qualifies for an exemption under Michigan sales tax law.
Purpose: Used for transactions exempt from sales tax, such as purchases by government agencies, nonprofit organizations, or for resale purposes.
Usage: The buyer provides the certificate to the seller at the time of purchase to avoid paying sales tax.
Retention: Sellers must keep a copy of the certificate on file to validate tax-exempt transactions in case of an audit.
Valid Reasons for Exemption
Exemption Category | Description | Examples |
|---|---|---|
Resale | Items purchased for resale. | Products bought by retailers for inventory. |
Manufacturing | Materials or equipment used directly in production. | Machinery, raw materials, and production tools. |
Nonprofit Organizations | Tax-exempt entities making qualified purchases. | Purchases by charitable or educational organizations. |
Government Agencies | Federal, state, or local government entities. | Supplies or equipment bought by government offices. |
Agricultural Use | Equipment and supplies used exclusively in farming. | Tractors, fertilizers, and animal feed. |
What is exempt from sales tax in Michigan?
Over 80% of Michigan businesses highlight tax compliance as a top operational priority, with exemptions offering significant savings and revenue opportunities, reflecting the overall impact on the Michigan economy.
This table outlines key Michigan sales tax exemptions to support compliance and cost efficiency:
Category | Exempt Items |
|---|---|
Essential Goods | Prescription medications, over-the-counter drugs, and certain medical equipment. |
Nonprofit Organizations | Purchases by qualifying charitable, religious, and educational organizations. |
Government Entities | Transactions made by federal, state, and local government agencies. |
Agricultural Products | Seeds, fertilizers, pesticides, and farm equipment used in production. |
Manufacturing | Machinery, tools, and equipment used directly in manufacturing. |
Resale | Items purchased for resale are exempt with proper resale documentation. |
Educational Materials | Textbooks and supplies purchased for school use. |
Occasional Sales | Casual or isolated sales by individuals not engaged in regular business activities. |
Additional Notes
Michigan exempts grocery items from sales tax, while prepared foods are generally taxable, highlighting unique features of the tax system.
Specific exemptions, such as for manufacturing equipment or agricultural products, require proper exemption certificates.
CQ For more details on Michigan sales tax exemptions, read Kintsugi's guide: The Michigan Sales Tax Exemption: A 2025 Business Guide.
Michigan Sales Tax Permits, Registration, and Filing in 2025
This section simplifies obtaining permits, filing returns, and meeting payment deadlines effectively for businesses with buyers in Michigan.
How do I get a Michigan sales tax permit?
To obtain a sales tax permit in Michigan, follow these steps:
Register Online: Visit the Michigan Treasury Online (MTO) Portal to start your registration for a sales tax license.
Provide Business Details: Submit information such as your business name, address, type of business entity, and federal EIN or Social Security number.
Pay the Registration Fee: Michigan does not charge a fee for obtaining a sales tax license.
Receive Your Permit: Once approved, you'll receive a Michigan Sales Tax License, which allows you to collect and remit sales tax.
Note: Michigan requires businesses with physical or economic nexus to register for a sales tax license before collecting sales tax.
How do I submit a State of Michigan sales tax registration?
To register for Michigan sales tax, follow these steps. Michigan also offers customer support for registration through the Michigan Department of Treasury at (517) 636-6925.
Determine if You Need to Register
You must register for Michigan sales tax if your business:
Has a physical presence (nexus) in Michigan (e.g., office, warehouse, employees).
Meets economic nexus thresholds by making over $100,000 in gross sales or 200 or more separate transactions annually in Michigan.
Gather Required Information
Before starting, ensure you have:
Business Information: Legal name, DBA (if applicable), federal EIN or SSN.
Address Details: Physical and mailing addresses.
Business Type: LLC, sole proprietorship, corporation, etc.
Sales Estimates: Estimated taxable sales in Michigan.
Bank Account Information: For filing and payment setup.
Register Online
Visit the Michigan Department of Treasury website.
Create an account or log in to the Michigan Treasury Online (MTO) portal.
Select Register a New Business and follow the prompts to complete your sales tax registration.
Submit Application
Review the form for accuracy before submitting.
Once approved, you will receive a Michigan Sales Tax License, which allows you to collect and remit sales tax.
Begin Collecting and Filing Sales Tax
Start collecting Michigan sales tax on taxable transactions.
File and remit collected sales tax through the MTO portal based on your assigned filing frequency (monthly, quarterly, or annually).
Michigan Sales Tax Filing
This section breaks down Michigan's sales tax requirements, including filing rules, taxable items, and permits.
What are the main Michigan filing requirements?
Michigan sales tax filing requirements depend on the size and frequency of taxable sales:
Filing Frequency: Businesses must file monthly, quarterly, or annually based on their total sales tax liability.
Due Date: Returns are due on the 20th of the month following the reporting period.
Filing Method: Returns must be filed electronically through the Michigan Treasury Online (MTO) portal.
Additional Requirements: Businesses must report all taxable and exempt sales and remit payment for collected taxes by the due date to avoid penalties and interest.
Filing Frequency Criteria
Filing Frequency | Criteria |
|---|---|
Monthly | For businesses collecting $108 or more in sales tax per month. |
Quarterly | For businesses collecting less than $108 in sales tax per month but more than $27 per quarter. |
Annually | For businesses collecting $27 or less in sales tax per quarter. |
Note: Michigan requires electronic filing for most businesses. Retailers must report and remit the 6% state sales tax, with no additional local taxes. Accurate reporting of taxable and exempt sales is essential to compliance.
What does Michigan sales tax apply to?
Michigan sales tax applies to the following categories, with certain exemptions such as for groceries, prescription medications, and medical devices.
Category | Description | Examples |
|---|---|---|
Tangible Personal Property | Most goods, unless exempt. | Furniture, electronics, clothing. |
Taxable Services | Certain services are subject to sales tax. | Amusements, telecommunications, some repairs. |
Digital Goods | Digital products transferred electronically. | Prewritten software, e-books, digital media. |
Leases and Rentals | Rentals of equipment and property. | Equipment rentals, car rentals. |
Prepared Foods | Meals and drinks sold by food service businesses. | Restaurant meals, takeout, catering. |
Note: Michigan imposes a 6% statewide sales tax with no additional local taxes. Businesses must report and remit sales tax on all taxable sales, ensuring compliance with state-specific exemptions.
How to file sales tax in Michigan
To file sales tax in Michigan, follow these steps:
Log in to Michigan Treasury Online (MTO): Access the Michigan Treasury Online portal using your credentials.
Complete the Sales Tax Return: Enter total taxable sales, exempt sales, and any use tax amounts.
Calculate Tax Due: MTO automatically calculates the sales tax owed based on your entries.
Submit Payment: Pay electronically through the portal or by other approved methods.
Meet Deadlines: Returns are due by the 20th of the month following the reporting period (monthly, quarterly, or annually, depending on your assigned frequency).
Maintain Records: Keep copies of filed returns and payment confirmations for audit purposes.
CQ For more details on how to file a sales tax return in Michigan, read Kintsugi's guide: How to File a Sales Tax Return in Michigan: A Comprehensive Guide.
FAQs
What day is Michigan sales tax due?
Michigan sales tax is due on the 20th of the month following the reporting period for monthly and quarterly filers, or February 28th for annual filers.
Does Michigan have a sales tax holiday?
No, Michigan does not currently offer a sales tax holiday.
Automate Your Michigan Sales Tax with Kintsugi
Managing Michigan sales tax compliance can be complex, from verifying local tax rates to tracking exemptions and meeting filing deadlines. Kintsugi simplifies this process with powerful automation tools designed for modern businesses.
Feature | Description |
|---|---|
Accurate Tax Rate Calculations | Automatically apply the correct state and local sales tax rates based on your customer’s location. |
Exemption Management | Seamlessly identify and apply exemptions for groceries, prescription medications, and other qualifying items. |
Effortless Filing | Streamline your tax reporting and filing process with integrations that calculate, track, and submit sales tax payments. |
ERP and eCommerce Integration | Connect with platforms like Shopify, QuickBooks, Amazon, and more for seamless tax data management. |
Let Kintsugi handle the complexities of Michigan sales tax so you can focus on growing your business. Visit our Product Platform and Pricing pages to learn more and get started today!
