Michigan: Sales Tax Handbook
How to file your sales taxes in Michigan
Once your business has a Michigan sales tax license and begins to make sales, you are required to start collecting sales taxes on behalf of the Michigan government and filing regular sales tax returns. This page will help you understand the basics of your tax collection and filing responsibilities.
How To Collect Sales Tax In Michigan
If the seller has an in-state location in the state of Michigan, they are legally required to collect sales tax at the statewide tax rate, which is 6% in the state of Michigan. There are no local tax rates.
If the seller's location is out of state, then the same policy applies: the state of Michigan still requires the seller to charge the statewide sales tax rate. Sellers in this situation are known as a "remote seller". This means that the business is based outside of the state, yet still has tax nexus in Michigan.
Sales Tax Collection Discounts In Michigan
Michigan allows merchants to keep a small percentage of the sales tax they collect as a collection discount, which serves as compensation for the work required to comply with the Michigan sales tax regulations
The state of Michigan has a somewhat complicated discount system. A vendor can take of the greater of: 0.75% of the tax which is due at the rate of 4% for the prior month (in which there is a maximum due tax of twenty thousand dollars); for payments which were made between the twelth and the twentyth of a month, 0.5% of the tax due, also utilizing a rate of 4% for the preceding month (with maximum tax due of fifteen thousand dollars); or the tax will be collected at a rate of 4% on one hundred and fifty of the taxable purchase price for the previous month, which comes out to six dollars
Your Michigan Sales Tax Filing Requirements
To file sales tax in Michigan, you must begin by reporting gross sales for the reporting period, and calculate the total amount of sales tax due from this period.
In the state of Michigan, all taxpayers have three choices, for filing their taxes. One option is to file online by using the Michigan Department of Treasury's online system. The Michigan Treasury Online (MTO) system can be utilized to both file and pay your business's taxes online, and the eRegistration system can be used to register a new business tax account.
You can also file manually through the mail, using Form 5080. This form is only applicable for filers who choose to file by the month or by the quarter.
Taxpayers in Michigan should be aware of late penalties the state applies. The penalty for both filing late or paying late is 5% of the total unpaid tax due for the first two months. After two months have gone by, 5% of the tax that has not yet been paid is assessed for each individual month. The maximum percentage of compounded interest is 25%.
The state of Michigan requires that a seller who owns a sales tax permit files sales tax return on the required day, so long as the tax return would have been "zeroed-out", and there is nothing to report.
Your Michigan Sales Tax Filing Frequency & Due Dates
Your business's sales tax return must be filed by the 20th of the month following reporting period. For a list of this year's actual due dates, see our calendar of Michigan sales tax filing due dates.
Where To File Your Michigan Sales Tax Return:
Filing Your Michigan Sales Tax Returns Online
Michigan supports electronic filing of sales tax returns, which is often much faster than filing via mail.As of 2016, Michigan has transferred from the old "Michigan Business OneStop" platform to the new Michigan Treasury Online (MTO) system, which is used for managing and updating business registration information, filing and paying your sales taxes, and acquiring sales tax licenses.
Michigan allows businesses to make sales tax payments electronically via the internet.Electronic payments are equired only if the cumulative sales and use tax liability for prior calendar year is, at minimum seven hundred and twenty thousand dollars..
You can process your required sales tax filings and payments online using the official Michigan Treasury Online website, which can be found here . You should have received credentials to access your Michigan Treasury Online account when you applied for your Michigan sales tax license.
Filing Your Michigan Sales Tax Returns Offline
While it is highly recommended that you file online using the Michigan Treasury Online website, it is possible to file your required sales tax reportings offline using Michigan Form 160, which you can download and print here . Once you have completed your required reportings, you can mail it to the state at this address:Michigan Sales Tax Filing Address: Michigan Department of Treasury
Detroit, MI 48277-0003
Please note that if you file your Michigan sales taxes by mail, it may take significantly longer to process your returns and payments.
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