Michigan's sales tax rate and what it covers

Michigan charges a 6% sales tax on most goods you buy in the state. This is the base rate that applies statewide. When you buy something at a store, the cashier adds 6% to your total at checkout. Some cities and counties add their own local tax on top of that, which can raise your final rate to 6.5% or higher depending on where you shop.

The 6% applies to tangible personal property — things you can touch and take home. Clothing, groceries, electronics, furniture, and gasoline all fall under this. However, not everything is taxed the same way. Some items are taxed at a lower rate, and some are not taxed at all.

Key Takeaways

  • Michigan's base sales tax is 6%, but your actual rate depends on your city or county, which may add local tax on top.
  • Groceries and prescription medications are taxed at 0%, while prepared food and alcohol are taxed at the full 6%.
  • Services like haircuts, repairs, and medical visits are generally not subject to sales tax in Michigan.
  • Online purchases from out-of-state sellers may or may not have Michigan tax added, depending on whether the seller has a physical presence in the state.

What is and isn't taxed in Michigan

Food you prepare at home is not taxed. This means groceries — bread, milk, vegetables, meat, cereal — all ring up at 0% tax. The same goes for prescription medications filled at a pharmacy. However, prepared food is taxed at the full 6%. If you buy a sandwich from a deli counter, a hot rotisserie chicken, or food from a restaurant, you pay sales tax on it.

Alcohol and tobacco products are taxed at 6%, plus Michigan adds its own excise tax on top of that. Beer, wine, and cigarettes cost more than the shelf price suggests once you reach the register.

Services are generally not taxed. A haircut, car repair, plumbing work, dental cleaning, or house painting does not have sales tax added. The labor itself is tax-free. However, if the service includes selling you a physical product — like a mechanic who replaces your brake pads — the parts may be taxed while the labor is not.

Local sales tax rates by region

While the state rate is 6%, many Michigan cities and counties add their own local sales tax. This local portion ranges from 0.5% to 2%, depending on where you are. Detroit, for example, has a combined rate of 6%, but some surrounding areas in Wayne County go up to 6.5%. Traverse City in Grand Traverse County sits at 7%.

The easiest way to know your exact rate is to check your receipt from a recent purchase, or to search "Michigan sales tax by city" with your specific location. The Michigan Department of Treasury maintains a list of all local rates by county and municipality. Your rate depends on where the store is located, not where you live — if you shop in a different city, you pay that city's rate.

How sales tax is calculated at checkout

The store calculates tax on the subtotal before any discounts are applied. If you have a coupon, the tax is usually calculated on the discounted price, not the original price. If you buy multiple items, each item's tax is calculated separately and then added together, though the difference is usually just a few cents.

Some stores round the total to the nearest cent. If your tax comes to $5.634, the store rounds to $5.63. This rounding is standard and legal in Michigan.

Sales tax on online and out-of-state purchases

If you order something online from a company that has a physical store, warehouse, or office in Michigan, Michigan sales tax is added to your order. If the company has no physical presence in Michigan, they may not charge you Michigan tax — though this depends on the company's own policies and federal tax law.

Amazon, for example, collects Michigan sales tax on most items because it has fulfillment centers in the state. A small online retailer with no Michigan location may not. You are responsible for reporting and paying use tax on untaxed purchases, though most individuals do not do this. Use tax is Michigan's way of taxing purchases that escaped sales tax.

Who collects and where the money goes

The store collects sales tax from you at the register and sends it to Michigan's Department of Treasury. The state keeps most of it, but a portion goes to local governments — cities and counties use their local tax revenue for schools, roads, and public services. This is why the rate changes by location.

Businesses are required to register with the state and file sales tax returns, usually monthly or quarterly depending on how much tax they collect. If a store fails to send in the tax it collected, the state can audit them and impose penalties.

Resale certificates and tax-exempt purchases

If you are a business buying inventory to resell, you do not pay sales tax on those purchases. Instead, you provide the seller with a resale certificate, which is a form that proves you are buying for resale. The seller keeps the certificate on file instead of collecting tax.

Certain organizations — nonprofits, schools, and government agencies — can also be tax-exempt. They must register with the state and receive an exemption certificate. Without the certificate, they pay tax like anyone else.

Frequently Asked Questions

Do I pay sales tax on used items?

Used items sold by a business are taxed at the same 6% rate as new items. However, if you sell something to a friend or at a garage sale, no sales tax is involved — that is a private transaction. Only sales through a registered business are taxed.

Is clothing taxed in Michigan?

Yes, clothing is taxed at the full 6% rate in Michigan. Unlike some states that exempt clothing, Michigan taxes all apparel — shirts, pants, shoes, hats, and accessories all have sales tax added.

What about sales tax on car purchases?

Yes, when you buy a car from a dealer, Michigan sales tax applies to the purchase price. The dealer collects it and sends it to the state. If you buy a used car from a private seller, no sales tax is involved.

Can I get a refund of sales tax I already paid?

No, sales tax is final once you pay it. If you return an item and get a refund, the store refunds the tax along with the purchase price. If you paid tax on something you later found out should have been tax-free, you would need to contact the store or the Michigan Department of Treasury to dispute it.

Do I owe sales tax on items I bring into Michigan from another state?

If you buy something in another state and bring it to Michigan, you do not owe Michigan sales tax on it — you already paid tax where you bought it. However, if you order something from out of state and have it shipped to Michigan, Michigan tax may explore depending on the seller's location and policies.