Michigan Sales and Use Tax
Sales Tax. Sales tax is a tax on the gross proceeds of all dealers
engaged in the business of making sales at retail. The Michigan sales tax
rate is currently six (6%) percent. The tax is assessed on the dealer. The
tax is usually passed on to the buyer who pays the sales tax to the dealer
and the dealer collects and remits the sales tax to the State of Michigan.
If a dealer does not charge sales tax on a transaction or incorrectly
computes any sales tax due, the dealer is liable to the State of Michigan
for the unpaid sales tax.
Use Tax. Use tax is a tax on the privilege of using, storing or
consuming tangible personal property in the State of Michigan. For dealers
this means they must collect six (6%) percent use tax on lease receipts and
remit it to the State of Michigan and pay use tax on use of vehicles in
inventory. However, if Michigan sales tax was paid when the vehicle was
purchased then use tax is not charged on the lease receipts. Michigan law
requires that use tax be paid by the dealer. If the dealer does not charge
use tax on the lease payments or incorrectly computes any use tax due or
pays use tax on use of vehicles in inventory, the dealer is liable to the
State of Michigan for the use tax. Use tax is due with the monthly or
quarterly sales tax return.
Any items including vehicles purchased outside the State as an interstate
transaction and brought into the State are treated as acquired for
consumption in the State of Michigan and are subject to use tax when brought
into the State.