Our work is reader-supported, meaning that we may earn a commission from the products and services mentioned.

How To Register For A Michigan Sales Tax License

How To Register For A Michigan Sales Tax License

Advertising Disclosure

Advertising
Disclosure

How To Register For A Michigan Sales Tax License

Most businesses starting in Michigan selling a product or offering certain services will need to register for a Michigan sales tax license. This license is sometimes referred to as a seller’s permit, sales tax permit, sales tax number, or sales tax registration.

Check out the rest of this guide to determine who needs a sales tax license, what products and services are taxable, how to register, and reporting requirements.

Related: Guide to starting a business in Michigan

How to register for a sales tax license in Michigan

A Michigan sales tax license can be obtained by registering the E-Registration for Michigan Taxes or submitting Form 518. This registration will also allow a business to register for their Employer Account Number.

A business making sales at fewer than 3 events in Michigan should instead file the Concessionaire’s Sales Tax Return and Payment (Form 2271).

Information needed to register includes:

Sales tax reporting

How is sales tax collected?

When a business sells a taxable product or service, it charges the customer the appropriate sales tax rate. The business collects this tax, which it then sends to the Michigan Department of Treasury.

How much is sales tax in Michigan?

Michigan has a flat 6% sales tax rate across the state.

When are Michigan sales tax returns due?

The Department of Treasury will determine a filing frequency based on the expected volume of sales, which will either be monthly, quarterly, semiannually, or annually. Generally, a business selling over $16,675 in taxable sales each month will file monthly.

The due date of filings is the 20th day of the month following the reporting period unless the 20th falls on a weekend or federal holiday, in which case it would be the next business day.

Even if the business had no sales during the reporting period, a filing is still required indicating no sales occurred.

Michigan Sales Tax License FAQs

Who needs a Michigan sales tax license?

A business must register for a sales tax license in Michigan when:

– A business has sales tax nexus or economic nexus. Nexus means having a physical presence in the state, such as having a physical location like a retail store or office or using a warehouse or fulfillment center to store inventory.
– Making retail sales of products and taxable services in Michigan
– Employees (including sales representatives or agents) are working in Michigan
– An online business located in Michigan is selling taxable products to Michigan residents
– A remote seller sells over $100,000 in physical goods or has over 200 separate transactions annually to Michigan residents

Contractors and subcontractors are not required to get a sales tax license since they are considered the final consumers of the materials they affix to real property and will pay sales tax at the time of purchase.

What products and services are taxable in Michigan?

Physical Products: There are a few exceptions, but almost all physical products are taxable when sold at retail in the state of Michigan. Common examples include:

– General merchandise like furniture, appliances, and clothing
– Titled or registered items like vehicles

Certain manufacturing and agriculture equipment, including prescriptions, groceries, and medical devices, are tax-exempt. The Department of Treasury has a list of sales tax exemptions.

Digital Products: Digital products, with the exception of pre-written computers sold online, aren’t taxable.

Services: Most services aren’t taxable in Michigan, however, there are a few exceptions, some of which include:

– Short-term lodging
– Industrial laundry services

More information about taxable services is available from the Michigan Department of Treasury.

How much does a Michigan sales tax license cost?

There is no cost for a sales tax license in Michigan.

How long does it take to get a Michigan sales tax license?

Expect 8-10 business days for the processing of a Michigan sales tax license. This license must be displayed at each business location.

Do you have to renew a Michigan sales tax license?

Sales tax licenses expire on September 30 of each year. The Michigan Department of Treasury often automatically renews them but periodically requests updated information.

How do I get a wholesale license in Michigan?

A business is able to purchase items to resell without paying state sales tax. The tax liability is passed from the wholesaler or distributor to the retailer, who will then charge sales tax to the end-user of the item.

There isn’t a tax-exempt number provided to a business, however, there is a Michigan Certificate of Exemption (also referred to as a wholesale license, resale certificate, or sales tax exemption certificate) that allows for purchases to be made tax-free.

Is a business license the same thing as a sales tax license?

No – A business license and a sales tax permit serve distinct purposes.

A business license authorizes the operation of a business within a particular jurisdiction, ensuring compliance with local laws and regulations. On the other hand, a sales tax permit enables a business to legally collect sales tax from customers, which is then remitted to the state government. Typically, businesses require both a license and a permit to operate fully within the law.

Related: What business licenses are needed in Michigan

If you have questions about the sales tax license, the Michigan Department of Treasury has a guide to the Michigan Sales & Use Tax or can be contacted by calling 517-636-6925.

Author

  • Greg Bouhl

    With over two decades as an entrepreneur, educator, and business advisor, Greg Bouhl has worked with over 2,000 entrepreneurs to help them start and grow their businesses. Fed up with clients finding and acting on inaccurate and outdated information online, Greg launched StartUp101.com to be a trusted resource for people starting a business.

How To Register For A Michigan Sales Tax License

How To Register For A Michigan Sales Tax License

Leave a Reply

Your email address will not be published. Required fields are marked *

Some (but not all) of the links on StartUp101.com are affiliate links. This means that a special tracking code is used and that we may make a small commission on the sale of an item if you purchase through one of these links. The price of the item is the same for you whether it is an affiliate link or not, and using affiliate links helps us to maintain this website.

StartUp101.com is also a participant in the Amazon Services LLC Associates Program, an affiliate advertising program designed to provide a means for sites to earn advertising fees by advertising and linking to Amazon.com.

Our mission is to help businesses start and promoting inferior products and services doesn’t serve that mission. We keep the opinions fair and balanced and not let the commissions influence our opinions.