State of Michigan Sales and Use Tax

Sales tax mainly applies to retailers who sell to the final consumer. Services that provide labor and sell products must charge sales tax on the products sold.

Sales tax does not apply to wholesalers or contractors. Typically they purchase products used in the construction or wholesale process and paid the sales tax at the time of the sale.

Collection of sales tax when products are sold equates to your being the tax collector and custodian of the State’s money. The State is owed the sales tax and they work aggressively to make certain you submit it. What do you do with the sales tax money when it comes in the cash register? Are you prepared to turn around the money to the State when it is owed.

Michigan does not have any county, city or local taxes. The 6% sales and use tax is the only means the State has for tax income under this category.

Use tax is paid on ALL taxable items brought into Michigan or on out-of-state purchases by mail from out-of-state retailers. Use tax is also applied to such activities as hotel and motel accommodations, rentals, leases of out-of-state software or hardware, etc. Use tax is reported in the same manner as sales tax.

While sales and use tax may seem straight forward, like any tax, it is complicated and has specific rules. Forms must be filed at least annually depending on the amount of tax owed. In addition, taxpayers are eligible for discounts depending on dollar amounts submitted and the date they are submitted.

Did you know the State will send out inaccurate tax statements? If you do not submit your sales tax coupon, they will make one up for you. And on top of it, they add interest and penalties to it. Refer to our Blogs on this at State of Michigan Misleads Business Owners. (The IRS does not do this.)

We can work with the State to correct all your incorrect tax bills, or handle your Sales Tax Audit. We can meet with the Revenue Officer looking for past due sales taxes. Are you facing the seizure of your business for non-payment?

Contact us now before your Sales Tax problem mounts out-of-control. Contact Christy at 586-323-2360 and learn more about what can be done if you have a State issue.

To learn more about the State Sales and Use Tax.

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