What you need to do to get a Michigan sales tax license
To sell taxable goods or services in Michigan, you need a Michigan Sales Tax License — officially called a Sales and Use Tax License. You get it by registering with the Michigan Department of Treasury, which takes about 10 business days if you submit everything correctly. The state does not charge a fee for the license itself, though you will need to provide your federal Employer Identification Number (EIN) or Social Security Number, your business address, and details about what you plan to sell.
The license is not optional if you sell items subject to Michigan's 6% sales tax — which includes most tangible goods, prepared food, and certain services. You explore online through the Michigan Department of Treasury's Business Registration System, and once approved, you can begin collecting tax from customers. The state then expects you to file sales tax returns monthly, quarterly, or annually depending on how much you sell.
Key Takeaways
- Register online through the Michigan Department of Treasury's Business Registration System at michigan.gov/taxes.
- You will need your federal EIN or Social Security Number, business address, and a description of what you sell.
- The license is free, and approval typically takes about 10 business days.
- Once licensed, you must collect sales tax from customers and file returns with the state on a schedule based on your sales volume.
- If you sell only tax-exempt items (like groceries or prescription drugs), you may not need a license, but registering does not hurt.
Step-by-step: registering online through the Michigan Department of Treasury
Start at the Michigan Department of Treasury website and locate the Business Registration System. You will create an account with your email address and a password, then begin the registration form. The system will ask for your business name, the type of business structure (sole proprietorship, LLC, corporation, partnership), and your federal EIN or Social Security Number if you do not have an EIN yet.
Next, enter your business address — the physical location where you operate or where you keep records. If you are a home-based business, use your home address. The system will ask what you plan to sell and whether those items are subject to Michigan sales tax. Be specific: "retail clothing," "restaurant food," or "plumbing services" rather than vague descriptions. The state uses this information to determine your filing frequency and to flag any items that might be tax-exempt.
After you submit the form, the Department of Treasury reviews it. You will receive a confirmation email with a reference number. Within about 10 business days, you will get another email with your Sales and Use Tax License number. Print this number and keep it with your business records — you will need it when you file returns and when you order supplies or inventory from wholesalers who may ask for proof you are licensed.
What information and documents you will need before you start
Gather these items before you open the registration form: your federal Employer Identification Number (EIN) if you have one, or your Social Security Number if you are a sole proprietor without an EIN. You will also need your business address, the date you plan to start selling, and a clear description of what your business sells.
If you are registering as an LLC or corporation, have your Articles of Organization or Articles of Incorporation ready — you do not upload them, but the state may ask you to provide them later if there is a discrepancy. If you are a sole proprietor or partnership, you do not need formation documents. You should also know whether you have any employees, because that affects other registrations (like unemployment insurance), though it does not change the sales tax license process itself.
How long approval takes and what happens while you wait
The Michigan Department of Treasury typically approves sales tax licenses within 10 business days of a complete submission. If you submit on a Friday, the clock starts Monday. Weekends and state holidays do not count toward the 10 days. If your process is incomplete — for example, if you did not provide an EIN or your business address is unclear — the state will email you asking for the missing information, which restarts the clock.
While you wait, you can begin setting up your business and ordering inventory, but you cannot legally collect sales tax from customers until your license is active. Once you receive your license number by email, you are cleared to start. If you need your license faster, there is no expedited process, but submitting a complete, accurate form the first time is the fastest route.
What happens after you receive your license number
Once you have your license number, you are required to collect sales tax from customers on taxable items. Michigan's sales tax rate is 6%, though some cities and counties add a local tax on top — check your specific location on the Michigan Department of Treasury website to confirm the total rate you owe.
You will also need to file sales tax returns with the state. How often depends on your sales volume: if you sell less than $1,200 per month on average, you file annually; if you sell $1,200 to $4,999 per month, you file quarterly; if you sell $5,000 or more per month, you file monthly. The state will tell you your filing frequency when you receive your license. You file returns online through the same Business Registration System, and you pay any tax you owe at that time. If you collected more tax than you owe (because some items were exempt or you made a mistake), the state credits the overage to your next return or refunds it.
Items that are tax-exempt in Michigan
Some items do not require you to collect sales tax, even if you are licensed. Groceries and food for home consumption are exempt — but prepared food sold hot or ready-to-eat is taxable. Prescription drugs are exempt, but over-the-counter medications are taxable. Clothing and footwear are exempt, but accessories like hats, gloves, and belts are taxable. Industrial machinery and equipment used directly in manufacturing are exempt under certain conditions.
If you sell only exempt items, you technically do not need a sales tax license. However, registering does not hurt, and it can be useful if you ever expand into taxable items later. If you sell a mix of taxable and exempt items, you still need a license and must track which sales are taxable and which are not on your returns.
When to contact the Michigan Department of Treasury
If your process is rejected or you do not receive a license number within 15 business days, contact the Michigan Department of Treasury's Business Tax Division. You can reach them by phone at 517-335-3000 or through the contact form on their website. Have your reference number from your initial submission ready.
You should also contact the state if your business address changes, you add a new location, you change what you sell, or you plan to stop collecting sales tax. The state may require you to update your registration or file a final return. Do not ignore these changes — the state matches sales tax returns to your registered business profile, and mismatches can trigger audits.
Frequently Asked Questions
Do I need a sales tax license if I sell online or ship to Michigan from out of state?
If you have a physical location in Michigan or you regularly sell to Michigan customers, you need a Michigan sales tax license regardless of where you are based. If you are out of state and sell only occasionally to Michigan customers, the rules are complex and depend on your sales volume and whether you have "economic nexus" in Michigan. Contact the Michigan Department of Treasury to confirm your situation.
What if I already have a federal EIN but have not registered with Michigan yet?
Use your existing EIN when you register. You do not need a separate state ID number. The Michigan Department of Treasury will cross-reference your EIN with federal records to verify your business exists.
Can I register for a sales tax license before I officially start my business?
Yes. The registration form asks when you plan to start selling. You can register a few weeks before you open, which gives you time to receive your license number and set up your point-of-sale system before your first customer arrives.
What if I sell items that might be taxable or exempt and I am not sure which category they fall into?
Contact the Michigan Department of Treasury before you register or after you receive your license. Describe the item in detail, and they will tell you whether it is taxable. It is better to ask than to guess and file returns incorrectly.
Do I need separate licenses for each location if I have multiple stores?
No. One sales tax license covers all your Michigan locations. However, you must list each location when you register, and if you add a new location later, you need to update your registration with the state.