Who is subject to Michigan business tax? The tax applies to C Corporations and any entity that elects to be taxed as a C corporation.
Generally, a business has nexus in Michigan when it has a physical presence there, such as a retail store, warehouse, inventory, or the regular presence of traveling salespeople or representatives.
The base tax rate for Michigan sales tax is 6%. The local sales tax rates can vary according to the city or county.
Owners pay state income tax on any profits, minus state allowances or deductions. Owners pay federal income tax on any profits, minus federal allowances or deductions. A 21.99 percent surcharge is imposed and applies to the Michigan Business Tax liability.
Every employer in Michigan is subject to one or more kinds of payroll taxes. Payroll taxes are used to pay for government programs such as Social Security and Medicare.
Michigan does not technically have a corporate income tax.
Understanding different taxes allows you to make informed decisions that will benefit your business and help you stay on the right side of the law.