If your limited liability company (LLC) sells physical products or certain types of services, you will need to collect and pay sales tax. In Michigan, the first step is visiting the treasury department’s website and registering for sales tax in order to acquire a seller’s permit, or sales tax permit.
What Products and Services Are Subject to Sales Tax in Michigan?
Tangible property sold in Michigan is subject to sales tax. Telecommunications, utilities, hotel services, and industrial laundry services are also subject to sales tax. Groceries and prescription drugs are exempt from sales tax.
Michigan Sales Tax Rate
The sales tax rate in Michigan is 6%.
Five states have no sales tax. Colorado has the lowest sales tax at 2.9%, while California has the highest rate at 7.25%.
How to Register for Michigan Sales Tax
In Michigan, acquire a seller’s permit by following the Department of the Treasury’s detailed instructions for registration:
- Visit the Michigan Treasury online website.
- Register for an account on the site.
- Complete the business tax registration form.
- There is no fee for a sales tax permit in Michigan.
Use our Sales Tax Calculator to calculate taxes and total purchase amount.
In Michigan, and across the country, collecting sales tax is a must if you want to avoid potentially heavy fines and even closure. It’s crucial that you follow your state’s laws, and you might consider consulting with an accountant or tax attorney to make sure you’re in full compliance.