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Michigan Tax Laws Overview
- Michigan does not tax digital goods.
- The state sales tax rate is 6% statewide.
- You must pay 6% use tax to Michigan on out-of-state purchases not charged sales tax.
- Compliance with the tax laws is reported to be low.
Sales Tax Regulations for Online Retailers
- Large online retailers in Michigan must now collect and remit the 6% sales tax.
- This aims to create a fair, level playing field and could bring in about $60 million annually.
- Out-of-state online retailers must pay 6% Michigan sales tax on sales made after September 30, 2018.
- The law now requires the state to collect from out-of-state companies, potentially impacting consumer costs.
Taxation of Software and Use Tax
- Software is taxable in Michigan.
- If a business has a physical presence in Michigan, it must collect sales tax; otherwise, no need to collect sales tax.
- Michigan residents should pay 6% use tax on online, mail order, or out-of-state purchases.
Michigan Use Tax Regulations
- Items brought into Michigan for storage, use, or consumption may be subject to a 6% Michigan Use tax.
- Credit is given for any sales or use tax legally due and paid in another state at the time of purchase.
