State of Michigan Flag

Michigan Sales Tax Guide for Businesses

Sales Tax Rate
6.0%
Local Taxes
None
Website
Department of Treasury
Tax Line
517-373-3200

We wrote this guide for online sellers who want to know if they even have to bother with sales tax in Michigan, and if so, how best to tackle the sales tax situation in the Wolverine State.

After reading this, you’ll know:

  • Do you or don’t you need to collect Michigan sales tax?
  • Which customers do you collect from?
  • How much do you collect?
  • What do you do with all the sales tax you’ve collected?
  • Way more than you probably ever wanted to know about Michigan sales tax!

Do you have sales tax nexus in Michigan?

Good news! You only have to begin thinking about Michigan sales tax if you have sales tax nexus in Michigan.

“Sales tax nexus” is just a fancy way of saying “significant presence” in a state.

Michigan considers a seller to have sales tax nexus in the state if you “sell tangible personal property to a consumer.”

You can click here to read exactly what the Michigan Department of Treasury has to say about sales tax nexus(Michigan’s taxing authority) has to say about what constitutes sales tax nexus in Michigan.

Is what you’re selling even taxable?

You’ve probably read this far because you realized you have sales tax nexus in Michigan. Your next step is to determine if what you’re selling is even taxable.

Services in Michigan are generally not taxable. So if you’re a freelance writer or a plumber, you’re in luck and you don’t have to worry about sales tax. But watch out – 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 exceptions. These exceptions include vehicles sold to relatives, some industrial machinery, and some equipment used in agriculture.

So if you sell toys, then charge sales tax to your Michigan customers.

But if you’re a graphic designer, don’t charge sales tax to your Michigan customers.

If you have sales tax nexus in Michigan and your products are taxable, your next step is to register for a sales tax permit.

How to Register for a Sales Tax Permit in Michigan

Sellers with sales tax nexus in Michigan must apply for an Michigan sales tax permit.

Don’t skip this step! Many states consider it unlawful to collect sales tax in their name without a permit. Go here for more on how to register for a sales tax permit in Michigan.

How to Collect Sales Tax in Michigan

So you’ve determined that you have sales tax nexus in Michigan and what you’re selling is taxable.

And you’re all set and registered for your Michigan sales tax permit.

The next step is to determine how much sales tax to collect.

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.

Read a full explanation of sales tax on shipping in Michigan here.

When are Michigan Sales Tax 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. (Example: The 2016 annual sales tax return is due on February 28, 2017.)

How often you are required to file sales tax in Michigan follows this general rule:

Average Monthly Tax Liability Filing Frequency
$300.01 and up Monthly
$62.51 to $300.00 Quarterly
$0 to $62.50 Annually

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.

2017 Michigan Monthly Sales Tax Filing Due Dates

Taxable Period Due Date
*January February 21, 2017*
February March 20, 2017
March April 20, 2017
*April May 22, 2017*
May June 20, 2017
June July 20, 2017
*July August 21, 2017*
August September 20, 2017
September October 20, 2017
October November 20, 2017
November December 20, 2017
* December January 22, 2018*

*indicates a due date pushed back due to a weekend or holiday

2017 Michigan Quarterly Sales Tax Filing Due Dates

Taxable Period Due Date
Q1 (Jan - Mar) April 20, 2017
Q2 (Apr-Jun) July 20, 2017
Q3 (Jul-Sep) October 20, 2017
*Q4 (Oct-Dec) January 22, 2018*

*indicates a due date pushed back due to a weekend or holiday

2017 Michigan Annual Sales Tax Filing Due Dates

Taxable Period Due Date
Year 2016 February 28, 2017
Year 2017 February 28, 2018

Click here for a chart of Michigan sales tax filing due dates in 2017.

How to File Sales Tax in Michigan

When it comes time to file sales tax in Michigan you must do three things:

  1. Calculate how much sales tax you owe
  2. File a sales tax return
  3. Make a payment

We’ll walk you through these steps.

How to Calculate How Much Sales Tax You Owe in Michigan

Calculating how much sales tax you should remit to the state of Michigan is easy with TaxJar’s Michigan sales tax report.

All you do is connect the channels through which you sell – including Amazon, eBay, Shopify, Square and more – and we’ll calculate exactly how much sales tax you collected. All the information you need to file your Michigan sales tax return will be waiting for you in TaxJar. All you have to do is login!

How to File and Pay Sales Tax in Michigan

You have three options for filing and paying your Michigan sales tax:

  • File online - File online at the Michigan Department of Treasury. You can remit your payment through their online system.
  • File by mail - You can use Form 5080 and file and pay through the mail, though this form is only applicable for monthly or quarterly filers.
  • AutoFile - Let TaxJar file your sales tax for you. We take care of the payments, too. You’ll never have to worry about spreadsheets, calculations or filling out complex sales tax returns.

Other Facts You Should Know about Michigan Sales Tax Filing

There are a few more things you should know about sales tax in Michigan:

Penalties:

  • Failure to file and/or pay – Penalty is 5 percent of the total unpaid tax due for the first two months. After two months, 5% of the unpaid tax amount is assessed each month. The maximum late penalty is equal to 25% of the unpaid tax owed.

Other penalties for fraud or serial offenses include higher penalties and even criminal charges.

“Zero returns”:

Michigan requires that any seller with a sales tax permit file a sales tax return on your due date even if you don’t have any sales tax to report or pay. Click here for a list of states that require zero sales tax returns.

And that’s it. You’ve mastered Michigan sales tax filing! Now that sales tax is out of the way, you can get back to what you do best – running your business.

Michigan Sales Tax Resources

For more about Michigan sales tax, check out the Michigan section of the TaxJar blog.

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