Michigan

Michigan

Standard rate:  

6%

Reduced rate:

Sales tax-free products and services:

Groceries, Prescription Drugs, Machinery, Utilities & Fuel, Newspapers, and others.

Who is obliged to register sales tax:

You must register in Michigan and pay use tax on sales and rentals if you: sell in Michigan, qualify as a dealer under the definition, and meet the threshold.

Threshold:

Starting September 30, 2018, out-of-state dealers with sufficient physical or economic presence for establishing nexus in Michigan must register to collect sales tax. This includes online sellers or remote sellers that meet the $100,000 threshold – or more than 200 transactions in the state in the previous or current calendar year.

Merchant thresholds by state

Marketplace thresholds by state

The special rules are applicable for the SAAS business.

Software as Service Tax Thresholds by state

Online Marketplaces:

If all of your sales in Michigan are through a marketplace platform, and you are not a marketplace facilitator, you can not register for paying Michigan sales tax. Your marketplace facilitator pays the sales tax itself.

If you are selling through your own marketplace, then you will need to register for paying sales tax if you meet the threshold.

Merchant thresholds by state

Marketplace thresholds by state

Registration procedure:

You can be registered online on the Michigan Department of Treasury website.

Sales tax payment and filing date: 

Depending on your tax liability, determine your filing frequency – either annual, monthly or quarterly:

Annual –  $0 to $62.50
Quarterly – $62.51 to $300.00
Monthly – $300.01 and up

Returns are always due on the 20th of the month following the reporting period. If the filing due date falls on a weekend or holiday, sales tax is generally due the next business day.

Penalty and interest:

Failure to file or pay –5 % of the total unpaid tax due for the first two months.

Further – 5% of the unpaid tax amount is assessed each month. (maximum 25%)

Discount: