Michigan Business License in 2026: Sales Tax License, Assumed Names, LARA Licences and Detroit Rules

If you are opening a business in Michigan and searching for a state business license, you will not find a single licence that covers everyone. Michigan regulates businesses through a set of narrower registrations: a free sales tax license for sellers, assumed name filings for trade names, occupational licences from LARA and other agencies, and local licences in cities such as Detroit. This guide explains each one, what it costs in 2026, how Detroit's licensing and city income tax work, and the property tax exemption that saves most small businesses a filing. Figures were checked with each agency in October 2026.

Quick answer

Michigan has no general state business license. If you sell taxable goods, you need a sales tax license from the Department of Treasury, which is free and renews automatically. Trade names are filed with your county clerk (sole proprietors) or LARA (entities), regulated trades need a LARA or agency licence, and some cities, including Detroit, license specific business types.

• Sales tax license: $0 (free); rate 6% everywhere, no local add-ons

• LLC assumed name with LARA: $25, valid about five years

• Detroit licences mostly renew every two years on May 31

• Business personal property under $180,000 per local unit can be exempt with Form 5076

Does Michigan have a state business license?

No. Michigan does not require a general licence for every business. The state's Department of Licensing and Regulatory Affairs (LARA) is the main licensing agency, but it licenses occupations and regulated activities, such as builders, cosmetologists, real estate agents and health professionals, rather than businesses in general. LARA's Corporations Division also registers LLCs and corporations, which is a registration rather than a licence.

For many owners, the closest thing to a business licence is the sales tax license from the Michigan Department of Treasury. If you sell taxable goods at retail, you need it before your first sale. If you provide services that are not taxable, such as consulting, design or most repairs billed as labour, you may need no state licence at all beyond your entity filing and income tax registrations.

Cities and townships add their own layer. Michigan local governments do not generally issue blanket business licences, but some license particular activities, and a number of cities, Detroit among them, levy a city income tax that businesses must register for.

The Michigan sales tax license

You need a sales tax license if you make retail sales of tangible personal property in Michigan, including online sales from a Michigan location. It costs $0 (free). You register through Michigan Treasury Online (MTO), or on paper with Form 518, Registration for Michigan Taxes, which also covers use tax, withholding and other state taxes. Treasury says the licence renews automatically each year unless you cancel it, and you display it at your place of business.

Michigan's rate is a flat 6% statewide, with no county or city sales taxes, which makes pricing simpler than in neighbouring Ohio or Indiana. Returns are due by the 20th of the month after the period, and every filer, whatever its frequency, also files an annual return by February 28.

Out-of-state sellers must register once they had more than more than $100,000 in sales to Michigan customers or 200 or more separate transactions in the previous calendar year. Sellers who sell only through a marketplace that collects Michigan tax do not register for those sales. Our Michigan sales tax guide covers what is taxable, use tax, filing frequency and the discount.

Michigan at a glance (2026)

$0 (free)

Sales tax license

6%

Sales tax rate, statewide

$50

LLC articles of organization

$180,000

Personal property tax exemption ceiling

Assumed names: county clerk or LARA

Who files a DBA in Michigan depends on your structure. Sole proprietors and general partnerships that trade under a name other than the owners' names file a Certificate of Persons Conducting Business Under Assumed Name with the county clerk. LARA's guidance says the certificate must be filed in every county where business is transacted, so a mobile groomer serving Oakland, Macomb and Wayne counties files three times. County fees vary, so check your county clerk's website.

LLCs and corporations file a Certificate of Assumed Name (Form CSCL/CD 541) with LARA's Corporations Division. For an LLC the fee is $25 under the Michigan LLC Act. The assumed name expires on December 31 of the fifth calendar year after the year you file it, so a name filed in 2026 runs until December 31, 2031, unless you renew it.

Forming the entity itself is separate. A Michigan LLC files articles of organization for $50 and then an annual statement by February 15 each year for $25, a fee scheduled to fall to $15 after September 30, 2027. Our Michigan LLC guide walks through the steps, and every entity needs a registered agent.

Where to file a Michigan DBA

Business type	File with	Form	Fee
Sole proprietor or general partnership	County clerk in every county of business	Certificate of Persons Conducting Business Under Assumed Name	Set by each county
LLC	LARA Corporations Division	CSCL/CD 541 Certificate of Assumed Name	$25
Corporation	LARA Corporations Division	CSCL/CD 541 Certificate of Assumed Name	Check LARA's fee schedule

Sole proprietor or general partnership

File with

County clerk in every county of business

Form

Certificate of Persons Conducting Business Under Assumed Name

Fee

Set by each county

LLC

File with

LARA Corporations Division

Form

CSCL/CD 541 Certificate of Assumed Name

Fee

$25

Corporation

File with

LARA Corporations Division

Form

CSCL/CD 541 Certificate of Assumed Name

Fee

Check LARA's fee schedule

Occupational licences from LARA and other agencies

Most of Michigan's real licensing happens by occupation. LARA's Bureau of Professional Licensing handles professions such as cosmetology and barbering, real estate, accountancy and many health professions, using the MiPLUS online system. The Bureau of Construction Codes licenses residential builders, maintenance and alteration contractors, electricians, plumbers and mechanical contractors. The Michigan Liquor Control Commission issues liquor licences, child-care providers are licensed by the state's child care licensing bureau, and food businesses are licensed by local health departments or the Michigan Department of Agriculture and Rural Development, depending on the type of operation.

Construction is the most common trigger. Anyone who builds, remodels or repairs residential structures for pay generally needs a residential builder licence or a maintenance and alteration (M&A) contractor licence. An M&A licence covers specific trades you choose, such as carpentry, roofing, siding or basement waterproofing. Applicants complete 60 hours of approved prelicensure education, covering topics such as business management, contracts, the Michigan Residential Code and MIOSHA safety, and then pass the state exam. A single project with an aggregate contract price below $600 is exempt, but LARA warns that splitting work into smaller contracts to stay under the limit does not count. An LLC or corporation needs its own company licence with a qualifying officer; an individual licence does not cover it.

Local licences: the Detroit example

Detroit is the clearest example of a Michigan city that licenses specific business types. Its Buildings, Safety Engineering and Environmental Department (BSEED) says plainly that not all businesses need a licence. The licensed categories include nightclubs and cabarets, vendors, lodging, theatres and halls, amusements, consumer services, concert cafes, gas stations, motor trucks, vehicles for hire, parking lots, valet parking, cigarette retail, pet shops, second-hand dealers such as pawnbrokers, scrap and used auto dealers, sexually oriented businesses, and carnivals and riding devices.

Most Detroit licences expire every two years on May 31, though some differ: gas stations renew on August 31, vehicles for hire on October 31, parking lots on January 31 and consumer services on June 30. Each licence needs clearances from other departments before it is issued, commonly fire, property maintenance, Treasury and environmental health. Fees vary by type; for example, a concert cafe licence costs $345, a pet shop $99 and a hotel with up to 50 rooms $345. You apply and renew online through the city's Accela/eLAPS system, and the Business License Center can be reached at (313) 224-3179.

Restaurants are a common source of confusion. BSEED says restaurants no longer need a BSEED business licence, but they still need a licence from the Detroit Health Department, plus the usual building, fire and zoning approvals.

Detroit city income tax

Detroit also taxes business income. The city's rates are 2% for corporations, 2.4% for resident individuals and 1.2% for nonresidents, with partners taxed at the rate that matches their status. Since 2017 the Michigan Department of Treasury has administered Detroit's corporate, partnership and fiduciary income tax returns. If you have employees working in the city, you also withhold Detroit tax from their pay. Other Michigan cities with an income tax, such as Grand Rapids and Lansing, set their own rates and filing rules.

The personal property tax exemption

Michigan taxes business personal property, such as furniture, equipment and computers, through the local assessor. Most small businesses can avoid that tax. Under the small business taxpayer exemption, a business whose commercial and industrial personal property in a local unit has a true cash value of less than $180,000 can claim an exemption by filing Form 5076 with the city or township assessor. Grand Rapids, for example, requires the form by February 20, and late claims go to the March Board of Review.

The form goes to the local assessor, not to Treasury. Once granted, the exemption generally continues while you qualify, but you must tell the assessor if you exceed the limit, move or close. If you do not qualify, you file a personal property statement instead.

How to get set up in Michigan

Getting legally set up in Michigan

1. 1

   Register your entity or assumed name

   Form an LLC with LARA for $50, or, as a sole proprietor using a trade name, file with the county clerk in each county where you do business.

   Michigan LLC guide
2. 2

   Get an EIN

   Free from the IRS; needed for entities and employers.

   EIN guide
3. 3

   Register with Treasury

   Use Michigan Treasury Online or Form 518 for the free sales tax license, withholding and other state taxes.

4. 4

   Get any occupational licence

   Check LARA, the Liquor Control Commission, your health department and other agencies for your trade before you start work.

5. 5

   Clear local requirements

   Check zoning or home occupation rules, your city's licensed business list, and city income tax registration.

6. 6

   Claim the personal property exemption

   File Form 5076 with your local assessor by February 20 if your business property is under $180,000.

Worked examples

A gift shop in Ann Arbor, single-member LLC. The owner files articles for $50, adds a certificate of assumed name for the shop's brand at $25, and registers for the free sales tax license on MTO. State setup cost: $75. Her fixtures and computer are worth about $30,000, so she files Form 5076 with the city assessor and pays no personal property tax. Each year she pays the $25 annual statement fee and charges 6% on sales, so a $25 candle costs $26.50.

A mobile dog groomer in metro Detroit, sole proprietor. She trades as "Motor City Mutts" and works in Wayne, Oakland and Macomb counties, so she files an assumed name certificate with each county clerk. Grooming is a service, but she also sells shampoo and accessories, so she registers for the free sales tax license. Before taking Detroit appointments, she checks the city's licensed categories and asks the Business License Center whether her mobile service needs a licence.

A roofer in Grand Rapids. He completes 60 hours of prelicensure education, passes the exam and is licensed as an M&A contractor for roofing. When he forms an LLC, the company needs its own licence with him as qualifying officer. Each job needs a building permit from the city, and he budgets for Grand Rapids' city income tax on his profits.

Hiring, home businesses and closing down

Taking on your first employee adds registrations that sit outside any licence. You register for Michigan income tax withholding with Treasury, usually on the same Form 518 or MTO application as your sales tax license, and you register with the Unemployment Insurance Agency for state unemployment tax. If you work in a city with an income tax, you withhold that city's tax too. Most employers with at least one employee also need workers' compensation insurance, so speak to an insurer before the first payday.

Home-based businesses face no state licence, but local zoning still applies. Michigan cities and townships commonly allow home occupations with limits on customer traffic, non-resident employees, signs and outdoor storage, and some require a home occupation permit. Check before you advertise your address, and read any homeowners' association rules as well.

When you close or sell the business, cancel the sales tax license and file a final return so Treasury stops expecting filings. Tell the local assessor so you are not assessed for property you no longer own, dissolve the LLC with LARA if you formed one, and file final city income tax returns. A buyer should ask the seller for evidence that sales and withholding taxes are paid, because Michigan can hold a purchaser liable for a seller's unpaid taxes if the purchase price is not escrowed.

Michigan setup checklist

0/8

• LLC or corporation filed with LARA, or county assumed name for a sole proprietor
• LARA certificate of assumed name for any entity trade name
• EIN from the IRS
• Free sales tax license through MTO, if selling taxable goods
• LARA or other occupational licence, if regulated
• City licence for listed activities, such as Detroit's BSEED list
• City income tax registration where applicable
• Form 5076 personal property exemption by February 20

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Common mistakes and how to fix them

The first mistake is paying for a "Michigan business license" from a private website. The state does not issue one, and the sales tax license is free when you apply directly with Treasury.

The second is filing an assumed name in only one county. Sole proprietors must file in every county where they do business, which catches contractors, cleaners and mobile services.

The third is letting an LARA assumed name lapse. Entity assumed names expire on December 31 of the fifth year, and LARA does not keep them alive for you. Diary the date when you file.

The fourth is skipping the personal property tax paperwork. Without a Form 5076 on file, the assessor can estimate your property and send a tax bill, even if you would have qualified for the exemption. If you missed the deadline, ask about the March Board of Review.

The fifth is assuming city licences cover everything. A Detroit licence does not replace health, fire or zoning approvals, and a LARA licence does not replace a city licence for listed activities. Check each layer.

The sixth is missing the annual sales tax return. Even monthly and quarterly filers must file an annual return by February 28, and filers with no sales in a period still file. Because the licence renews automatically, Treasury assumes you are still trading until you cancel it, so a dormant business that stops filing soon receives notices and estimated bills. If you pause trading, either keep filing zero returns or cancel the licence and re-register when you restart.

Official Michigan links

• Michigan Treasury — Sales and use tax
• Michigan Treasury Online (MTO)Register for the sales tax license and other state taxes
• LARA — Corporations Division forms
• LARA — Residential builders
• City of Detroit — Business licensing
• City of Detroit — Business income tax
• MCL 450.5101 — LLC fees

What to do next

Choose your structure with our Michigan LLC guide, check the name with the LLC name checker, and get an EIN. If you sell taxable goods, register for the free sales tax license and use our Michigan sales tax guide and sales tax calculator. Then check LARA for your occupation, your city's licence list and income tax, and file Form 5076 by February 20. For how other states handle licensing, see our business licenses overview.

This is general information, not legal or tax advice — confirm on the official source or with a professional.

Frequently asked questions

Does Michigan require a general business license?

No. Michigan has no general state business license. Depending on what you do, you may need a free sales tax license from the Department of Treasury, an assumed name certificate, an occupational licence from LARA or another agency, and local permits. Some cities, such as Detroit, license specific business types, but not every business.

How much does a Michigan sales tax license cost?

It is free ($0 (free)). You register through Michigan Treasury Online or with Form 518, Registration for Michigan Taxes, before making retail sales of taxable goods. The licence renews automatically each year unless cancelled, and you display it at your place of business. Michigan's rate is a flat 6% with no local add-ons.

Do I need a business license in Detroit?

Only if your business type is on Detroit's licensed list, which includes nightclubs and cabarets, vendors, lodging, amusements, consumer services, concert cafes, gas stations, parking lots, pet shops, second-hand dealers and others. Most licences renew every two years on May 31. Restaurants no longer need a BSEED licence but do need a Detroit Health Department licence. Detroit also levies a city income tax.

How do I file a DBA in Michigan?

Sole proprietors and partnerships file a certificate of persons conducting business under an assumed name with the county clerk in each county where they do business. LLCs and corporations file a certificate of assumed name with LARA; for an LLC the fee is $25. LARA assumed names expire on December 31 of the fifth calendar year after filing.

Do contractors need a licence in Michigan?

Yes, for most residential work. LARA licenses residential builders and maintenance and alteration contractors. Applicants complete 60 hours of prelicensure education and pass an exam. Work on a single project with an aggregate contract price under $600 is exempt, but splitting a job to stay under that limit is not allowed. Electricians, plumbers and mechanical contractors have separate licences.

Do I need a business license to work from home in Michigan?

There is no state general licence to get, but the other rules still apply. If you sell taxable goods, you need the free sales tax license. If you trade under a brand name as a sole proprietor, file an assumed name with your county clerk. Check your city or township zoning rules for home occupations before customers visit.

Sources & verification

Figures on this page were checked against the sources below when it was last reviewed on 12 October 2026. Each rate and limit is stored once with its own official source and review date, and official update channels are monitored daily so changes are picked up. How we verify

1. 1.Sales and Use Tax — Michigan Department of Treasury · accessed 12 October 2026
2. 2.Remote Seller FAQ — Michigan Department of Treasury · accessed 12 October 2026
3. 3.MCL 450.5101 — LLC fees — Michigan Legislature · accessed 12 October 2026
4. 4.Certificate of Assumed Name (Form CSCL/CD 541) — Michigan LARA Corporations Division · accessed 12 October 2026
5. 5.Filing at the County Level — Michigan LARA · accessed 12 October 2026
6. 6.Business Licensing — City of Detroit BSEED · accessed 12 October 2026
7. 7.Business Income Tax — City of Detroit Office of the Treasury · accessed 12 October 2026
8. 8.Residential Builders — Michigan LARA Bureau of Construction Codes · accessed 12 October 2026
9. 9.Prelicensure Education Requirements — Michigan LARA Bureau of Construction Codes · accessed 12 October 2026
10. 10.Apply for a Small Business Property Tax Exemption — City of Grand Rapids Assessor · accessed 12 October 2026
11. 11.Annual Reports and Annual Statements — Michigan LARA · accessed 12 October 2026