MI Michigan State sales tax rates

STATEWIDE SALES TAX RATE

ECONOMIC SALES THRESHOLD

$100,000

TRANSACTIONS THRESHOLD

200

Do you need to collect sales tax in Michigan?

You’ll need to collect sales tax in Michigan if you have nexus there. There are two ways that sellers can be tied to a state when it comes to nexus: physical or economic. Physical nexus means having enough tangible presence or activity in a state to merit paying sales tax in that state. Economic nexus means passing a states’ economic threshold for total revenue or the number of transactions in that state.

Do you have physical nexus in Michigan?

Michigan considers a seller to have physical nexus if you “sell tangible personal property to a consumer.”

Do you have economic nexus in Michigan?

Effective October 1, 2018, Michigan considers vendors who make more than $100,000 in sales or have more than 200 transactions in the state in the previous calendar year to have economic nexus. This means that according to Michigan state tax laws, these vendors are obligated to collect sales tax from buyers in the state.

Is what you’re selling taxable?

Services in Michigan state are generally not taxable. However, if the service you provide includes creating or manufacturing a product, you may have to deal with the sales tax on products.

Tangible products are taxable in Michigan, with a few exemptions. These tax exemptions include vehicles sold to relatives, some industrial machinery, and some equipment used in agriculture.

Is SaaS taxable in Michigan?

SaaS is non-taxable in Michigan.

Collecting Sales Tax

The sales tax rate you collect in Michigan is fairly simple. There are no local sales tax rates in Michigan, so you would charge buyers in Michigan the 6% state sales tax rate on regular taxable items. This is true whether you are based in Michigan or considered a “remote seller” (i.e. based outside of Michigan but have sales tax nexus in Michigan.)

Should you collect sales tax on shipping charges in Michigan?

In most cases if you have sales tax nexus in Michigan and the item you are selling to a buyer in Michigan is taxable then you are required to charge sales tax on shipping and handling charges.

When are Returns Due?

When you file and pay Michigan sales tax depends on two things: your assigned filing frequency and your state’s due dates.

How often will you file sales tax returns in Michigan?

States assign you a filing frequency when you register for your sales tax permit. In most states, how often you file sales tax is based on the amount of sales tax you collect from buyers in the state.

In Michigan, you will be required to file and remit sales tax either monthly, quarterly, or annually.

All taxpayers, even those on a monthly or quarterly schedule, are required to file an annual sales tax return by the final day of February in the year following the taxable period.

Michigan sales tax returns are almost always due the 20th of the month following the reporting period. (The exception is the annual sales tax return, which is due the last day of February the year following the taxable period.) If the filing due date falls on a weekend or holiday, sales tax is generally due the next business day.