Tax scope and rate
Michigan imposes a 6% sales tax on persons engaged in the business of making sales at retail of tangible personal property. The tax is levied as an annual privilege tax on gross proceeds of retail sales, less deductions allowed by the General Sales Tax Act.
Source: Mich. Comp. Laws § 205.52(1)
The complementary use tax applies at the same 6% rate to the storage, use, or consumption of tangible personal property in Michigan when Michigan sales tax has not been paid. Use tax applies to purchases from out-of-state sellers, remote sellers, and purchases made online or through catalogs when the seller does not collect Michigan sales tax.
Source: Mich. Comp. Laws § 205.93
Source: Michigan Department of Treasury, Use Tax
Michigan's constitution prohibits local governments from levying their own sales taxes. The 6% rate is uniform statewide—Detroit, Grand Rapids, Ann Arbor, and all other municipalities charge exactly 6%.
## Reduced rate for residential utilities
Sales of electricity, natural gas, and home heating fuels for residential consumption are taxed at 4%, not the standard 6% rate.
Source: Mich. Comp. Laws § 205.52(2)(a)
## What is taxable
The sales tax applies to retail sales of tangible personal property—physical goods transferred for consideration. This includes most physical products sold to end users.
Source: Mich. Comp. Laws § 205.52(1)
The tax also applies to limited categories of services, including intrastate telecommunications services and hotel/lodging accommodations.
Source: Mich. Comp. Laws § 205.93a
Services are generally exempt from Michigan sales and use tax. Michigan does not impose a broad-based service tax—only specific enumerated services are subject to tax.
## Who must collect
Any person engaged in the business of making sales at retail in Michigan must obtain a sales tax license and collect the tax. A Michigan sales tax license is required before engaging in or continuing a taxable business, regardless of sales volume.
Source: Mich. Admin. Code R. 205.1
Marketplace facilitators making or facilitating retail sales to Michigan purchasers must collect and remit tax on all sales they facilitate, regardless of whether the underlying marketplace seller has nexus with Michigan. This rule applies regardless of whether the marketplace facilitator has physical presence in Michigan.
Source: Mich. Comp. Laws § 205.52d
Remote sellers and out-of-state sellers with sufficient connection to Michigan must register and collect use tax. A seller is presumed to be engaged in business in Michigan if the seller maintains a physical presence in the state or meets other statutory criteria, including affiliate-nexus thresholds.
Source: Mich. Comp. Laws § 205.52b
Review status: Not yet human confirmed as of 2026-05-26.
Economic nexus threshold for remote sellers
A remote seller has nexus with Michigan if, in the previous calendar year, it made over $100,000 in gross sales or 200 or more separate transactions with Michigan customers. Meeting either threshold requires the seller to register and begin collecting sales or use tax on January 1 of the year following the year the threshold was exceeded. Gross sales include all sales to Michigan customers—taxable, nontaxable, and exempt transactions.
Sales tax registration process
Michigan law requires retailers to obtain a sales tax license before engaging in or continuing the business of making sales at retail, regardless of sales volume. The Michigan Department of Treasury administers registration through Michigan Treasury Online (MTO) e-Registration or by mailing Form 518, Registration for Michigan Taxes. According to the Department, online applications are authenticated within 10–15 minutes and processed within 48 hours, while paper applications require 4–6 weeks for processing. Once processed, the license is available immediately on MTO.
Source: Mich. Comp. Laws § 205.53
Source: Mich. Admin. Code R. 205.1
Source: Michigan Department of Treasury, Sales Tax License FAQ
Resale exemption
Property purchased for resale is exempt from Michigan use tax. Retailers purchasing for resale at retail and wholesalers purchasing for resale may claim this exemption. To support a resale exemption claim, sellers must maintain records including the purchaser's name, address, date of sale, article purchased, exemption type, amount of sale, and the purchaser's sales tax license or use tax registration number if claiming the resale exemption. Records must be retained for at least four years from the date tax was due.
Source: Mich. Comp. Laws § 205.94(1)(i)
Filing frequency and due dates
Michigan assigns each registered taxpayer a filing frequency—monthly, quarterly, or annual—based on estimated sales activity at registration and then annually based on prior-year tax liability. The Michigan Department of Treasury determines the frequency and notifies taxpayers in writing of any changes. Taxpayers cannot choose their own frequency; Treasury reviews and adjusts it each year.
Source: Mich. Comp. Laws § 205.56(4)
Source: Michigan Department of Treasury, Filing Frequency
Monthly and quarterly returns
Returns for monthly and quarterly filers are due on or before the 20th day of the month following the reporting period. A monthly filer with January sales must file and pay by February 20. A quarterly filer for the first quarter (January through March) must file and pay by April 20. The tax imposed accrues to the state on the last day of the month in which the sale occurs.
Source: Mich. Comp. Laws § 205.56(1)
Annual reconciliation requirement
All filers—including those filing monthly or quarterly—must also file an annual reconciliation return, Form 5081 (Sales, Use and Withholding Taxes Annual Return), by February 28 of the year following the tax year. This annual return reconciles and closes the calendar year (January 1 through December 31) and does not replace monthly or quarterly returns. Monthly and quarterly filers who skip this annual reconciliation face penalties on a return they often do not realize they owe.
Source: Michigan Department of Treasury, Filing Requirements FAQ
Source: Form 5081 Instructions
Annual-only filers
Taxpayers assigned an annual filing frequency file one return per year on Form 5081, due February 28 for the prior calendar year. Annual filers generally owe less than $750 in sales tax per year. Annual filers do not file monthly or quarterly returns.
Source: Michigan Department of Treasury, Filing Requirements FAQ
Zero-return requirement
If a taxpayer is registered for sales or use tax, they must file a return for each assigned period even if no tax is due for that period. Failure to file a zero return triggers penalties.
Source: Michigan Department of Treasury, Filing Requirements FAQ
Accelerated payment schedule
Taxpayers with annual sales tax liability of $720,000 or more are placed on an accelerated payment schedule and must remit 75% of their liability for the immediately preceding month or 75% of their liability for the same month in the immediately preceding calendar year (whichever is less), plus a reconciliation payment equal to the difference between the actual liability for the preceding month and the amount previously paid for that month. This payment is due on or before the 20th of each month by electronic funds transfer.
Source: Mich. Comp. Laws § 205.56(2)
Weekend and holiday rule
When a due date falls on a Saturday, Sunday, or legal holiday, the return and payment are due on the next business day.
Unable to confirm the specific statutory citation for the weekend/holiday rule as of 2026-05-28.
Marketplace facilitator collection obligations
Michigan requires marketplace facilitators to collect and remit sales and use tax on all taxable sales made by the facilitator or facilitated for marketplace sellers to Michigan purchasers, regardless of whether the underlying marketplace seller has nexus with Michigan. This obligation applies regardless of whether the marketplace facilitator has physical presence in the state. A marketplace facilitator is treated as a person engaged in the business of making sales at retail and has all the rights and duties of a taxpayer under Michigan's sales and use tax acts.
Source: Mich. Comp. Laws § 205.52d(1)–(2)
Source: Mich. Comp. Laws § 205.95c(1)–(2)
## Definition of marketplace facilitator
A marketplace facilitator is a person who facilitates a retail sale by a marketplace seller by (1) listing or advertising for sale by a marketplace seller in a marketplace tangible personal property or taxable services, and (2) either directly or indirectly through agreements or arrangements with third parties or affiliates collecting payment from the customer and transmitting that payment to the marketplace seller for consideration.
The statute excludes certain persons from the definition. A person is not a marketplace facilitator with respect to:
- Sales of or charges for rooms, lodgings, or accommodations if provided by a registered hotelkeeper, motel operator, or other person providing accommodations under their own brand, or
- Sales of telecommunications services.
Additionally, pure advertising platforms that do not collect and transmit payment are excluded—a person who operates a platform providing only advertising services (listing property for sale) without collecting payment from the customer is not a marketplace facilitator.
Source: Mich. Comp. Laws § 205.95c(11)(b)
## Effective date
Michigan's marketplace facilitator collection requirement took effect January 1, 2020, enacted by 2019 Public Acts 143 (sales tax) and 144 (use tax). The economic nexus policy that preceded codification was adopted by the Department of Treasury on August 1, 2018, effective October 1, 2018.
Source: Mich. Comp. Laws § 205.52d, History
Source: Revenue Administrative Bulletin 2021-22
## Tax base and reporting
The tax base for marketplace-facilitated sales is the sales price or purchase price charged by the facilitator to the customer, without regard to fees or commissions paid by the marketplace seller—whether paid directly or withheld by the facilitator. Marketplace facilitators must report both their direct sales and the sales they facilitate to Michigan purchasers in the manner prescribed by the Department of Treasury.
Source: Revenue Administrative Bulletin 2021-22
## Exemption documentation
Because the marketplace facilitator is generally the taxpayer for facilitated sales and is the party subject to audit, marketplace facilitators must obtain and maintain records of all claims of exemption consistent with Mich. Comp. Laws §§ 205.62 and 205.104b, unless the exemption is product-based (such as exempt food). Marketplace sellers must provide all exemption claims received directly from their customers to their marketplace facilitators.
Source: Revenue Administrative Bulletin 2021-22
## Audit and liability allocation
When a marketplace facilitator is required to remit tax under the statute, the Department of Treasury audits only the marketplace facilitator for sales made by marketplace sellers that were facilitated by the facilitator. The Department may not audit a marketplace seller for facilitated sales unless the marketplace seller fails to provide the facilitator with sufficient information to the extent the facilitator is not liable under the relief provisions.
A marketplace facilitator is relieved of liability for failure to remit the correct amount of tax to the extent it demonstrates that the failure was due to incorrect or insufficient information given by the marketplace seller. This relief does not apply if the marketplace seller is an affiliate of the marketplace facilitator. A marketplace facilitator is also relieved of liability if it demonstrates that the tax was already paid by the marketplace seller or if the facilitator provides a valid exemption claim from the marketplace seller's purchaser.
Conversely, a marketplace seller is not liable for tax on sales made through a marketplace facilitator required to remit tax, unless the seller fails to provide sufficient information to the facilitator to the extent the facilitator is not liable.
Source: Mich. Comp. Laws § 205.52d(6)–(9)
Source: Mich. Comp. Laws § 205.95c(6)–(9)
## Class action prohibition
Michigan law prohibits class actions against a marketplace facilitator in any Michigan court on behalf of purchasers arising from or related to an overpayment of sales tax remitted on facilitated sales, regardless of whether the claim is characterized as a tax refund claim. This prohibition does not affect an individual purchaser's right to seek a refund.
Source: Mich. Comp. Laws § 205.52d(4)