Sales tax in Michigan is a tax imposed on the retail sale of tangible personal property and certain services. The current statewide sales tax rate in Michigan is 6%, which is applied to the total selling price of goods and services.
What items are subject to sales tax in Michigan?
Most tangible personal property is subject to sales tax in Michigan, including items such as clothing, electronics, furniture, and vehicles. Some services, such as lodging and entertainment, are also subject to sales tax.
Are there any items exempt from sales tax in Michigan?
Certain items are exempt from sales tax in Michigan, including groceries, prescription medication, and some agricultural supplies. Additionally, sales of motor vehicles to nonresidents are exempt from sales tax.
Do I have to pay sales tax on online purchases in Michigan?
Yes, residents of Michigan are required to pay sales tax on online purchases if the seller has a physical presence in the state. If the seller does not have a physical presence in Michigan, use tax may be due.
What is the difference between sales tax and use tax in Michigan?
Sales tax is imposed on retail sales of tangible personal property and certain services at the point of sale, while use tax is imposed on the use, storage, or consumption of tangible personal property that was purchased without payment of sales tax.
How is sales tax calculated in Michigan?
Sales tax in Michigan is calculated by multiplying the total selling price of goods or services by the current statewide sales tax rate of 6%. The resulting amount is the sales tax due.
Who collects and remits sales tax in Michigan?
Businesses that make taxable sales in Michigan are responsible for collecting sales tax from their customers and remitting it to the state. Sales tax collected by businesses is held in trust until it is remitted to the state.
Is there a local sales tax in Michigan?
Yes, in addition to the statewide sales tax rate of 6%, there are also local sales taxes imposed by some cities and counties in Michigan. Local sales tax rates vary by jurisdiction.
Are there any sales tax holidays in Michigan?
Michigan does not currently have any sales tax holidays where certain items are exempt from sales tax for a limited period of time. However, legislators have proposed sales tax holidays in the past.
Can I get a sales tax refund in Michigan?
If sales tax was overpaid or paid in error, it may be possible to obtain a refund from the Michigan Department of Treasury. Refund claims must be filed within four years of the date the tax was paid.
What penalties are imposed for nonpayment of sales tax in Michigan?
Businesses that fail to collect or remit sales tax in Michigan may be subject to penalties and interest. Penalties can include fines, interest charges, and even criminal prosecution in severe cases.
How does Michigan use the revenue generated from sales tax?
Revenue from sales tax in Michigan is used to fund various state and local government programs and services, such as education, public safety, transportation, and infrastructure. Sales tax revenue plays a crucial role in supporting the state’s economy and public services.