Michigan Sales Tax Guide for Businesses
- Sales Tax Rate
- Local Taxes
- Department of Treasury
- Tax Line
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.
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?
Michigan sales tax returns are always due the 20th of the month following the reporting period. You’ll be assigned a sales tax filing frequency when you apply for your Michigan sales tax permit. You will file monthly, quarterly or annually.
All businesses registered for a sales tax license in Michigan are required to file annually, no matter if you are also required to file monthly or quarterly.
2016 Michigan Monthly Sales Tax Filing Due Dates
If your annual sales tax due in Michigan is over $3600, you will most likely be required to file monthly.
|Taxable Period||Due Date|
|January||February 22, 2016*|
|February||March 21, 2016*|
|March||April 20, 2016|
|April||May 20, 2016|
|May||June 20, 2016|
|June||July 20, 2016|
|July||August 22, 2016*|
|August||September 20, 2016|
|September||October 20, 2016|
|October||November 21, 2016*|
|November||December 20, 2016|
|December||January 20, 2017|
2016 Michigan Quarterly Sales Tax Filing Due Dates
If your annual sales tax due in Michigan is between $750 and $3600, you will file most likely be required to file quarterly.
|Taxable Period||Due Date|
|Q1 (Jan - Mar)||April 20, 2016|
|Q2 (Apr - Jun)||July 20, 2016|
|Q3 (Jul - Sep)||October 20, 2016|
|Q4 (Oct - Dec)||January 20, 2017|
2016 Michigan Annual Sales Tax Filing Due Dates
If your annual sales tax due in Michigan is less than $750, you will file most likely be required to file annually.
|Taxable Period||Due Date|
|Year 2016||February 28, 2017|
*indicates a due date pushed back due to a weekend or holiday
Click here for a chart of Michigan sales tax filing due dates in 2016.
How to File Sales Tax in Michigan
When it comes time to file sales tax in Michigan you must do three things:
- Calculate how much sales tax you owe
- File a sales tax return
- 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:
- 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.
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.