Sales tax
Michigan Sales Tax in 2026: The 6% Rate, Use Tax, Licensing, Filing and Prepayment
Michigan sales tax 2026: a flat 6% with no local add-ons, the free license, 6% use tax, filing on the 20th, the discount, prepayment and the fuel change.
Edited by Sumeet YadavFounder & editor, MSMETOOLS · fact-checked against official sources
Contents (10)
- 1. Michigan's 6% rate and why there are no local taxes
- 2. What's taxable in Michigan
- 3. Worked examples in dollars
- 4. Use tax: who owes it and how it's paid
- 5. Getting a Michigan sales tax license
- 6. Filing frequency, due dates and the annual return
- 7. Accelerated filers: the prepayment rule
- 8. Out-of-state sellers and marketplaces
- 9. Common mistakes and how to fix them
- 10. What to do next
If you sell goods in Michigan or ship to Michigan customers, the headline is simple: one 6% rate everywhere. The details aren't quite as simple. This guide covers what the rate applies to, how the matching 6% use tax works, how to get your free sales tax license, how Treasury sets your filing frequency, why the timely-filing discount works on only part of your tax, and how big sellers prepay. It also covers the 2026 change that took sales tax off gasoline and diesel.
Quick answer
Michigan's sales tax rate is 6%, and there are no county or city sales taxes, so Detroit, Grand Rapids and every other town charge the same 6%. Use tax is also 6%. Residential electricity, gas and heating fuel are taxed at 4%.
The sales tax license is free; register in Michigan Treasury Online
Monthly and quarterly returns are due by the 20th of the month after the period, plus an annual return by February 28
Groceries are exempt; prepared food, alcohol and tobacco are taxed
Sellers with $720,000+ of yearly tax prepay 75% each month
Remote sellers register after more than $100,000 or 200 or more separate transactions in the prior year
Michigan's 6% rate and why there are no local taxes
Michigan levies two taxes that work as a pair. The General Sales Tax Act taxes retailers on their gross receipts from sales of tangible personal property in Michigan. The Use Tax Act taxes the use, storage or consumption of goods in Michigan when sales tax wasn't paid, plus a handful of services. Both are 6%.
The rate is fixed in the state constitution. Article IX, Section 8 limits the sales tax to 4% and then adds a further 2%, which voters approved in 1994 as part of the Proposal A school funding reform, for a total of 6%. Changing the rate would take a constitutional amendment, which is why Michigan's rate has stayed put for more than 30 years while other states' rates have moved.
There are no local sales taxes in Michigan. Counties, cities and townships don't add anything at the register, so the rate in Detroit is the same 6% as in Marquette or Traverse City. That makes Michigan one of the easiest states for a multi-location retailer or an online seller: one rate, one return, no jurisdiction codes.
Some Michigan transactions carry other charges that look like sales tax but aren't. Hotel rooms pay use tax plus local convention and tourism assessments, and Detroit levies a city income tax. Neither changes the 6% rate on goods.
The 4% rate on home energy
The one exception to the flat rate is residential energy. Sales of electricity, natural gas and home heating fuel for residential use are taxed at 4%, and they're reported in a separate part of the return. Commercial and industrial energy is taxed at 6% unless an exemption applies, such as industrial processing.
What's taxable in Michigan
Sales tax applies to retail sales of tangible personal property: furniture, electronics, clothing, cars, building materials, prewritten software delivered on a physical medium and almost anything else you can touch. Clothing isn't exempt, and Michigan has no sales tax holiday.
Most services aren't taxed in Michigan. A plumber's labor, a consultant's fees, a haircut or a lawyer's bill carry no sales tax, though the business pays tax on the supplies it buys to deliver the service. The Use Tax Act, however, reaches several specific services, including hotel and motel room rentals and other accommodations, and telecommunications. Intrastate phone charges are taxable, and interstate charges are taxable when the call starts or ends in Michigan and is billed to a Michigan address, subject to exemptions for things like 800-number and international calls.
Food and groceries
The constitution exempts food for human consumption, except prepared food intended for immediate consumption, and prescription drugs. Treasury's Revenue Administrative Bulletin 2022-4 explains how the line is drawn.
Food and food ingredients are exempt, and the definition leaves out only alcoholic beverages and tobacco. Prepared food is taxable. That includes food the seller sells heated, food the seller mixes or combines into a single item, and food sold with eating utensils provided by the seller. The bulletin's own example is doughnuts sold with napkins and other utensils, which become taxable prepared food. Food that a seller only cuts, repackages or pasteurizes isn't prepared food. Bottled water isn't taxed.
For a grocery store or convenience store, the practical rule is to set your hot food, deli sandwiches you make and coffee as taxable, keep packaged groceries exempt, and charge 6% on beer, wine and tobacco.
Delivery and installation charges
Michigan changed its rules on delivery charges in 2023. Under Public Acts 20 and 21 of 2023, effective April 26, 2023, delivery and installation charges are excluded from the taxable price if they are listed separately on the invoice and the seller's books separately record them. If you lump delivery into the item price or don't track it separately, it's taxable. Utilities are the exception: transmission and distribution charges for gas and electricity stay in the tax base however they're shown.
If you deliver a mix of taxable and exempt items for one unseparated delivery fee, Treasury lets you allocate the fee by sales price or by weight.
No more sales tax on gas and diesel
The biggest 2026 change is at the pump. Public Act 17 of 2025 ended sales tax on eligible motor fuel bought on or after January 1, 2026, along with the prepaid sales tax that fuel wholesalers used to collect each month. In its place, the per-gallon motor fuel tax rose to 52.4 cents per gallon for 2026, adjusted for inflation each year. If you run a gas station or buy fuel for a fleet, your receipts no longer show sales tax on gasoline or diesel, and you no longer report or claim prepaid fuel tax on your sales tax return. Fuel bought before the switch and still in storage on January 1 was subject to a one-time floor stock tax.
Worked examples in dollars
A Grand Rapids furniture store. A customer buys a $1,800 dining set with a separately invoiced $120 delivery charge. Tax is 6% of $1,800, or $108. Because the delivery fee is stated separately and recorded separately, it isn't taxed. If the store had quoted one $1,920 "delivered" price, tax would be $115.20.
A Detroit coffee shop. A customer buys a $4 latte, a $3 pastry handed over with a napkin and a $10 bag of whole beans to take home. The latte and the pastry are prepared food, taxed at 6%: $0.42. The bag of beans is an unprepared grocery item and is exempt. Total tax: $0.42.
An Ohio online store. An Ohio seller made $130,000 of sales to Michigan customers in 2025, more than the more than $100,000 test. It had to register with Michigan and start collecting 6% on January 1, 2026. A $250 order shipped to Lansing now carries $15 of Michigan tax.
A contractor buying from out of state. A Kalamazoo landscaping company buys a $9,000 mower from an Indiana dealer that doesn't charge Michigan tax. The company owes Michigan use tax of $540 and reports it on its sales, use and withholding return.
Try it — Michigan sales tax on a $1,800 purchase
Use tax: who owes it and how it's paid
Use tax is the backstop for sales tax. If you buy taxable goods for use in Michigan and the seller didn't charge Michigan sales tax, you owe 6% use tax on the price. The most common cases for small businesses are equipment, supplies and software bought from out-of-state sellers that aren't registered in Michigan, and inventory you bought tax-free for resale and then used yourself, such as a hardware store taking a ladder off the shelf for its own use.
Businesses report use tax on the same combined sales, use and withholding return as their sales tax. Individuals who bought online without paying tax report it on their Michigan income tax return. Because both taxes are 6%, you'll never owe use tax on top of Michigan sales tax you've already paid on the same item.
Use tax is also how Michigan taxes the services it covers. Hotels collect use tax from guests on room charges, and telecommunications providers collect it on phone service.
Getting a Michigan sales tax license
Any business making retail sales of taxable goods in Michigan needs a sales tax license before it starts selling. The license is free. You can register online through Michigan Treasury Online (MTO), or on paper with Form 518, Registration for Michigan Taxes, which also registers you for use tax and income tax withholding if you'll have employees.
Getting set up to collect Michigan sales tax
- 1
Form your business and get an EIN
LLC registration guideRegister your LLC or corporation with Michigan's Department of Licensing and Regulatory Affairs if you're using one, and get a federal EIN from the IRS.
- 2
Register in Michigan Treasury Online
Michigan Treasury OnlineCreate an MTO account and register for sales tax, plus use tax and withholding if they apply. Estimate your monthly tax honestly: Treasury uses it to set your filing frequency.
- 3
Receive and display your license
Treasury issues a sales tax license that renews automatically each year unless you cancel it. Display it where you do business.
- 4
Set your products up correctly
Mark groceries, prescription drugs and resale items as exempt, and prepared food, alcohol and tobacco as taxable at 6%.
- 5
Collect exemption certificates
Take a completed Form 3372, Michigan Sales and Use Tax Certificate of Exemption, from resellers and other exempt buyers and keep it on file.
Wholesalers that sell only for resale don't need a sales tax license, even if they pass the remote seller thresholds, because their sales aren't taxable. They still need to keep the resale exemption claims from their customers in case of audit.
Filing frequency, due dates and the annual return
Michigan files sales tax, use tax and income tax withholding on one combined return, so all the taxes you're registered for share the same filing frequency. Treasury sets your frequency from the estimated monthly tax you give when you register, then reviews it every year based on your actual liability. You'll be assigned monthly, quarterly or annual filing.
Monthly returns are due by the 20th of the following month, and quarterly returns by the 20th of the month after the quarter ends. Annual filers pay once a year, by February 28. Every filer, monthly and quarterly included, also files an annual return by February 28 that reconciles the whole year. If a due date falls on a weekend or state holiday, it moves to the next business day.
You must file for every period on your assigned frequency, even if you made no sales. Treasury warns that filing more often than assigned can throw your account out of balance, though you can make payments as often as you like.
A monthly filer's calendar for late 2026
October 20
September return and payment due (and Q3 for quarterly filers)
November 20
October return due
December 21
November return due (the 20th is a Sunday)
January 20, 2027
December return due (and Q4 for quarterly filers)
March 1, 2027
2026 annual return due for all filers (February 28 is a Sunday)
The timely-filing discount
Michigan lets you keep part of the tax you collect if you pay on time, but the formula has a twist. The discount applies only to two-thirds of the tax you collect at the 6% rate, the share that corresponds to the original 4% constitutional rate. On that two-thirds, monthly and quarterly filers get 0.75% if they pay by the 12th of the month, up to $20,000 per period, or 0.5% if they pay between the 13th and the 20th, up to $15,000. The return worksheet also lists small flat-dollar discounts for low tax amounts.
| When you pay | Discount on two-thirds of 6% tax | Maximum per period |
|---|---|---|
| By the 12th (monthly or quarterly filer) | 0.75% | $20,000 |
| 13th to 20th (monthly or quarterly filer) | 0.5% | $15,000 |
| Accelerated filer, on time | 0.5% | No cap |
| After the due date | None | — |
Here's what that means in dollars. A Lansing shop that collects $6,000 of tax in a month gets a discount on two-thirds of it, or $4,000. Paying on the 18th, it keeps 0.5% of $4,000, which is $20. Paying by the 12th, it keeps 0.75%, or $30. Pay after the 20th and you lose the discount entirely and owe penalty and interest.
Accelerated filers: the prepayment rule
Large sellers prepay. If your Michigan sales or use tax liability in the previous calendar year was $720,000 or more, Treasury makes you an accelerated filer and you must pay electronically on an accelerated schedule. Treasury reviews accounts every year and notifies businesses of a change in the spring. Once any of your sales, use or withholding taxes is accelerated, all of them must be filed monthly.
Accelerated filers make two payments for each month:
- Prepayment, by the 20th of the current month. 75% of the lesser of the immediately preceding month's liability or the liability for the same month last year, or of the current month's actual liability if that's lower.
- Reconciliation, by the 20th of the next month. The difference between the actual liability for the month and the prepayment, filed with the monthly return.
One month for an accelerated filer
Step 1
Check last month's tax and the same month last year
Step 2
Prepay 75% of the lower figure by the 20th
Step 3
Month ends; work out actual tax
Step 4
Pay the balance with the return
by the 20th of the next month
Say a Detroit-area retailer owed $70,000 of sales tax in September 2026 and $64,000 in October 2025. Its October 2026 prepayment, due October 20, is 75% of the lesser figure, $64,000, which is $48,000. If its actual October 2026 tax comes to $72,000, it pays the $24,000 balance with the October return by November 20.
Accelerated filers keep a discount of 0.5% on the eligible part of their tax with no dollar cap. If the discount pushes your liability below $720,000, you're still an accelerated filer for that year. Payments go through MTO, by ACH credit or through approved software; wire transfers aren't accepted.
Out-of-state sellers and marketplaces
Since October 1, 2018, remote sellers with no physical presence in Michigan have had to collect Michigan tax once they pass the economic nexus test. The test looks at the previous calendar year: more than more than $100,000 in gross sales to Michigan customers, or 200 or more separate transactions. Unlike some states, Michigan counts taxable, non-taxable and exempt sales toward both tests. One order counts as one transaction, even if it has several items, several payments or ships in parts.
If you cross the line in 2026, you register and start collecting on January 1, 2027. Neither Michigan nor the Streamlined Sales Tax registration system charges a fee.
Marketplace facilitators such as Amazon, Etsy and eBay collect Michigan tax on the sales they facilitate. If you only sell through a marketplace that collects, Treasury says you shouldn't register for sales or use tax. If you also sell directly, through your own website or at events, you register and report those direct sales.
Michigan sales tax at a glance (2026)
6%
State rate, no local add-ons
$0
Sales tax license fee
more than $100,000
Remote seller test, prior year
or 200+ transactions
$720,000
Prior-year tax that triggers prepayment
Common mistakes and how to fix them
Applying the discount to all of your tax. The discount runs on two-thirds of the 6% tax, not the full amount. Over-claiming it creates a balance due and possibly a penalty. Use the worksheet in MTO or the return instructions.
Charging tax on separately stated delivery. Since April 2023, separately listed delivery and installation charges aren't taxable. If your invoices still tax them, fix the setup and refund customers you've overcharged.
Treating every grocery item as exempt. Hot food, food sold with utensils and food you combine yourself are prepared food. Alcohol and tobacco are always taxable.
Ignoring use tax on equipment. Equipment and supplies bought from out-of-state sellers that didn't charge Michigan tax are among the most common audit findings. Review your purchase invoices each month.
Skipping zero returns and the annual return. A missed return is a late return even if you owe nothing, and monthly and quarterly filers still owe the February 28 annual return.
Leaving fuel tax lines in place. If your system still charges sales tax on gasoline or diesel, or claims prepaid sales tax on fuel, update it for the January 1, 2026 change.
Official links
What to do next
Register in Michigan Treasury Online before your first sale, set prepared food, groceries and delivery charges up correctly in your point-of-sale system, and put the 20th of each month and February 28 in your calendar. Use the sales tax calculator to check invoices and our how to calculate sales tax guide for tax-inclusive pricing. Selling into neighboring states too? Compare our Ohio and Illinois sales tax guides.
This is general information, not legal or tax advice — confirm on the official source or with a professional.
Frequently asked questions
Michigan's sales tax rate is 6% of gross taxable sales, and the use tax rate is also 6%. There are no county or city sales taxes, so the same rate applies in Detroit, Grand Rapids, Ann Arbor and everywhere else. Residential electricity, natural gas and home heating fuel are taxed at a lower 4%. The Michigan Constitution caps the sales tax at 6%.
Detroit's sales tax is 6%, the same as the rest of Michigan, because Michigan doesn't allow local sales taxes. A $100 purchase in Detroit carries $6 of tax. Detroit does have a city income tax and hotel guests pay extra local assessments, but those aren't sales taxes.
Register through Michigan Treasury Online (MTO), or on paper with Form 518, Registration for Michigan Taxes. The license is free, and Treasury's remote seller guidance says it renews automatically each year unless you cancel it. You need it before you make retail sales of taxable goods in Michigan. Display it at your place of business.
Monthly and quarterly returns are due by the 20th of the month after the period. Every filer, whatever its frequency, must also file an annual return by February 28. Treasury assigns your filing frequency from your estimated tax when you register and reviews it each year. You must file even if you had no sales.
Food and food ingredients for home consumption are exempt under the Michigan Constitution. Prepared food is taxable, including food the seller heats, mixes or sells with utensils. Alcoholic beverages and tobacco aren't food for this purpose and are taxed at 6%. Bottled water is exempt.
Yes, if in the previous calendar year they had more than $100,000 in gross sales to Michigan customers or 200 or more separate transactions. Exempt and non-taxable sales count toward both tests. A seller that crosses a threshold registers and starts collecting on January 1 of the following year. Sellers who only sell through a marketplace that collects the tax don't register.
Sources & verification
Figures on this page were checked against the sources below when it was last reviewed on 9 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.Sales and Use Taxes — Michigan Department of Treasury · accessed 9 October 2026
- 2.Remote Seller FAQ — Michigan Department of Treasury · accessed 9 October 2026
- 3.Filing Requirements FAQ — Michigan Department of Treasury · accessed 9 October 2026
- 4.Instructions for 2026 Sales, Use and Withholding Taxes Monthly/Quarterly Return (Form 5096) — Michigan Department of Treasury · accessed 9 October 2026
- 5.Questions & Answers about Paying your Sales & Use Tax on an Accelerated Basis (Form 2316) — Michigan Department of Treasury · accessed 9 October 2026
- 6.Accelerated EFT Filers — Michigan Department of Treasury · accessed 9 October 2026
- 7.Use Tax — Michigan Department of Treasury · accessed 9 October 2026
- 8.Revenue Administrative Bulletin 2022-4 — Food for Human Consumption — Michigan Department of Treasury · accessed 9 October 2026
- 9.Delivery and Installation Charges Update — Michigan Department of Treasury · accessed 9 October 2026
- 10.Updated Notice Regarding Fuel Tax Changes from Public Acts 17-20 of 2025 — Michigan Department of Treasury · accessed 9 October 2026
- 11.Constitution of Michigan of 1963, Article IX, Section 8 — Michigan Legislature · accessed 9 October 2026
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