Sales and Use Tax FAQs

Sales Tax
Individuals or businesses that sell tangible personal property to the final consumer are required to remit a 6% sales tax on their taxable retail sales to the State of Michigan. Sales of electricity, natural or artificial gas and home heating fuels for residential use are taxed at the 4% rate. Michigan does not allow city or local units to impose sales or use taxes.

 

Use Tax
The use tax is a companion tax to the sales tax. Use tax of 6% must be paid on the total price (including shipping and handling charges) of all taxable items brought into Michigan or purchases through the internet or by mail or phone from out-of-state retailers that do not collect and remit sales or use tax from their customers. Credit is given for tax paid to another state. Use tax is also applied to certain services such as telecommunications and hotel/motel accommodations.

FAQs for Michigan Treasury Online (MTO) and 2015 Filing Changes

  • Do I have to file a return?  What if I don’t owe any tax?
    • Yes, a return is required to be filed even if no tax is due.
  • How do I log into Michigan Treasury Online (MTO)?
    • Please follow these instructions for adding MTO to your Michigan Business One Stop profile.
      Once MTO is added, follow these instructions for navigating through MTO.
  • I don’t have my access code, what do I do now?
    • Once you log into MTO for the first time, there is an option to request a new access code.  Please note: this code will be mailed to the legal address on file.

      You can also answer shared secrets about the company to gain access to their MTO profile.

      PLEASE NOTE: If you are approaching the deadline for filing your monthly/quarterly return, request a new access code and mail a paper return, Form 5080, with payment to avoid incurring late penalties and interest.
  • I can’t find Form 160 to file my monthly/quarterly taxes, what form do I use for my 2015 return?
     

    Old Form
    (2014 and prior tax years)

    New Form
    (2015)

    Form Title

    Additional Information

    160

    5080

    Sales, Use and Withholding Taxes Monthly/Quarterly Return

     

    NA

    5092

    Sales, Use and Withholding Taxes Amended Monthly/Quarterly Return

     

    165

    5081

    Sales, Use and Withholding Taxes Annual Return

     

    NA

    5082

    Sales, Use and Withholding Amended Annual Return

     

    429

    5083

    Fuel Supplier and Wholesaler Prepaid Sales Tax Schedule

    This is now a schedule to be e-filed in connection with your 5080 or 5092 through MTO.

    430

    5084

    Fuel Advance Credit Repayment

     

    2189

    5085

    Fuel Retailer Supplemental Schedule

    This is now a schedule to be e-filed in connection with your 5080 or 5092 through MTO.

    92

    5086

    Vehicle Dealer Supplemental Schedule

    This is now a schedule to be e-filed in connection with your 5080 or 5092 through MTO.

    48

    5087

    Purchasers Use Tax Return

     

    388

    5088

    Seller’s Use Tax Return

    Keep a copy for your records

    2271

    5089

    Concessionaire’s Sales Tax Return and Payment

     

    4601

    5091

    Sales, Use and Withholding Taxes 4% and 6% Annual Return

    This form must be submitted electronically through MTO.

    NA

    5093

    Sales, Use and Withholding Taxes Amended 4% and 6% Annual Return

    This form must be submitted electronically through MTO.

    NA

    5094

    Sales, Use and Withholding Taxes Payment Voucher

    This is used to submit a paper check after electronically submitting your return.

    3862

    5095

    Sales, Use and Withholding Monthly/Quarterly and Amended Monthly/Quarterly Worksheet

    Keep for your records

    151

    151

    Authorized Representative Declaration (Power of Attorney)

     

    163

    163

    Notice of Change or Discontinuance

     

  • I filed and paid my monthly taxes but the return and payment are not showing up on my profile, what’s wrong?
    • Your return will be available for viewing and printing in MTO once it has been received by Treasury. Your payment will be available for viewing within 72 hours of submission.  Your indication that the return has been filed is that it is no longer available to select on your list of monthly/quarterly returns under the “File and Pay a Tax Return” option.

 

  • I am a monthly/quarterly filer.  The only return showing up on my profile to file is my annual return, what do I do?
    • We are aware of this issue and are working to resolve it.  Please paper file Form 5080 and continue to check MTO for your profile to be updated.
  • I make my sales/use tax payment, but a third party makes my withholding payment, how will this work on MTO?
    • You will select the tax type you want to file on MTO and submit that information.  The third party may, at a different time, select withholding tax and file and pay using MTO.

 

  • When filing my monthly/quarterly return it is asking me for “gross sales”, is this correct?  Does this mean only taxable sales or all sales?
    • “Gross sales” means all taxable and nontaxable services and/or products.  Please complete Form 5095, Sales, Use and Withholding Monthly/Quarterly and Amended Monthly/Quarterly Worksheet, to calculate the tax that is due on Line 2 of your monthly/quarterly return.

 

  • Do I file under my ME number or my Federal Employer Identification Number (FEIN)?
    • Starting with the 2015 tax period, taxpayers must use the FEIN.
  • I filed my return and received a confirmation number, the system never asked for my payment information.  What do I do?
    • Taxpayers are experiencing issues with their pop up blocker preventing the link to our PayConnexion’s website to make a payment.  Please use this guide to safely add MTO to your approved list of websites.

      You can also print Form 5094, Payment Voucher, and mail a check for the January 2015 tax period. 

 

  • If I e-filed my return and payment prior to 2015, do I still need to use the MTO site?  Or can I continue to e-file?
    • EFT payments must now be made through MTO. The PayConnexion (PCX) system will be decommissioned for SUW tax payments in early 2015. Other tax type payments (including MBT, CIT, and FTW) may still be made through the bizpayments website’s PCX link.

      The existing link on the bizpayments web site will continue to be active in calendar 2015 as this link is needed by CIT/FTW/MBT taxpayers desiring to make electronic payments via PCX.

      SUW taxpayers will be able to continue to make 2014 and prior electronic payments via the existing link until early 2015. In approximately March 2015, the SUW related tax codes in PCX will be deactivated. When that occurs, the SUW taxpayers will no longer be able to make electronic payments via PCX from the existing link on the bizpayments web site.

 

  • Do I need to submit an EFT application to make payments on MTO for my sales, use and withholding taxes?
    • No. After filing your return on MTO, you will be given the option to make a payment.  The system will link you to our pay website, Pay Connexion, where you will have the option to register and enter your banking or credit card number to make a payment. 
  • I have received a letter stating my monthly/quarterly return was not received.  I have never submitted a monthly/quarterly return.  Why am I receiving this letter?
    • Beginning tax year 2015, all taxpayers are required to submit a return for every month/quarter depending on their filing frequency.

FAQs for Filing Requirements and Filing Deadlines

As of 2015, all businesses are required to file monthly, quarterly and/or annual returns each year along with the appropriate payment(s).


 Filer

 Due Date for Remitting Return and Payment

Monthly

On or before the 20th day of the following month

Quarterly

On or before the 20th day of the month following the quarter

Annual

February 28th

Electronic Funds Transfer (EFT)

On or before the 20th of the following month
EFT Filing Requirements

Accelerated Electronic Funds Transfer (EFT)

75% of taxpayer's sales tax liability from the immediately preceding month (or the same period last year, whichever is lower) is due on the 20th of the current month.  The reconciliation payment, equal to the difference between the tax liability determined for the immediately preceding month minus the amount of tax previously paid for that month is due on the 20th day of the following month.
For example: For the January 2015 period.  The December 2014 tax liability equals $1,000,000.  A payment of 75%, or $750,000 is due on January 20, 2015 with the reconciliation payment of $250,000 due on February 20, 2015.
Accelerated EFT Filing Requirements

  • Where are my coupons?
    • Starting in 2015, preprinted returns will not be mailed.  Please use Form 5080, 2015 Sales, Use and Withholding Taxes Monthly/Quarterly Return.
  • I didn’t file my monthly/quarterly returns.  Can I just file the annual return?

 

    • No. The annual return is due February 28th and is used to reconcile, balance, and close the year.  Please contact Treasury at (517) 636-6925 to request replacement returns for your account.
  • How often do I need to file a tax return for sales, use and withholding taxes?
    • When you register your business with Treasury, the application requires you to estimate your Sales, Use and Withholding tax liability for the year to determine one of the following filing frequencies:
      • If your annual tax due is less than $750, you would file annually.
      • If your annual tax due for the year is between $750 and $3,600, you would file quarterly.
      • If your annual tax due for the year is over $3,600, you would file monthly

      Note: It is your responsibility to notify Treasury if your total tax liability changes so your filing frequency can be adjusted accordingly.
  • I need to amend my sales, use and withholding tax return.  What is the process?
    • For the 2014 tax period and prior years, complete a new Form 165, Annual Return for Sales, Use and Withholding Taxes.  Check the “amended” box and fill out the explanation indicating the reason for the amendment. 
    • Beginning tax year 2015, amended returns can be easily submitted through MTO.  For paper filers, Form 5092 can be used to amend your monthly/quarterly figures and Form 5082 can be used to amend your annual figures. 

FAQs for Exemptions

  • I am a 501(c )(3)/501(c )(4) Organization, how do I claim exemption from Michigan Sales and Use Tax?
    • A nonprofit 501(c)(3) or 501(c)(4) organization must provide the seller with a completed Form 3372, Michigan Sales and Use Tax Certificate of Exemption and a copy of the organizations federal determination letter granting their 501(c)(3) or 501(c)(4). 
  • I am a 501(c)(3)/ 501(c)(4) organization, how to I become exempt from Michigan sales and use tax?
    • Michigan Department of Treasury no longer has an application process for nonprofit organizations to apply for exemption from Michigan sales and use tax.

      Organizations exempted by statute, organizations granted exemption from federal income tax under Internal Revenue Code Section 501(c)(3) or 501(c)(4) or organizations that had received an exemption letter from the Department prior to June 1994 are entitled to sales and use tax exemption in the State of Michigan.  Please refer to Revenue Administrative Bulletin (RAB) 1995-3, available on the Department's Web site, /treasury, which explains the exemption from Michigan sales and use tax as it relates to nonprofit entities.

      In order to claim exemption, the  nonprofit organization must provide the seller with a completed form 3372, Michigan Sales and Use Tax Certificate of Exemption, which must be supported by evidence of nonprofit eligibility, either the letter issued by the Department (prior to June 1994) or your federal determination as a 501(c)(3) or 501(c)(4) organization. 

 

  • A customer is providing me with their tax exempt number as proof they do not have to pay sales tax on their purchase, is this correct?
    • The Department of Treasury does not issue tax exempt numbers.  To claim exemption for purchases the buyer must present the seller with a completed Form 3372, Michigan Sales and Use Tax Certificate of Exemption, available on our Web site.

 

  • I am a retailer, how do I claim a resale exemption with my supplier?
    • In order to claim exemption, a retailer must provide the seller with a completed Form 3372, Michigan Sales and Use Tax Certificate of Exemption, and indicate the purchase is for “Resale at Retail”.   Their sales tax license number must be included in the space provided on the exemption claim.

      Please be advised that a seller should not accept a number as evidence of exemption from sales and use taxes.
  • How do I get a tax exempt number?
    • The Michigan Department of Treasury does not issue "tax exempt numbers". Sellers should not accept a number as evidence of exemption from sales and use tax. To claim exemption for purchases the buyer must present the seller with a completed Form 3372, Michigan Sales and Use Tax Certificate of Exemption, available on our Web site.

      For more information on exemptions see Revenue Administrative Bulletin 2002-15.
  • How do I claim an exemption from Sales or Use Tax?
  • Is my “rolling stock” purchase exempt from tax?
    • PLEASE BE ADVISED THAT YOUR FIRST TRACTOR/TRAILER PURCHASES MAY NOT BE EXEMPT FROM MICHIGAN SALES OR USE TAX.  THE FOLLOW CRITERIA MUST BE MET:
    • Michigan provides a sales and use tax exemption to interstate (fleet) motor carriers  that meet all of the following criteria:
      • You must be an interstate motor carrier.  An Interstate Motor Carrier is defined as a person engaged in the business of carrying persons or property, other than themselves, their employees, or their own property, for hire across state lines, whose fleet mileage was driven at least 10% outside of Michigan in the preceding tax yearTax year is defined as a full 12 months.
      • You must have purchased, stored, used, or consumed rolling stock, which is defined as a commercial motor vehicle unit that has 2 axles and a gross vehicle weight rating in excess of 10,000 pounds, or a commercial motor vehicle power unit that has 3 or more axles, a trailer designed to be drawn behind the above described power units, and parts affixed to either the power units or trailer.
      • The rolling stock must be used in interstate commerce.  The interstate commerce carrier property must be licensed for use in other states and have an International Fuel Tax Agreement (IFTA) decal.

      Interstate (fleet) motor carriers who qualify for exemption may claim exemption from sales or use tax by providing the seller or lessor with the prescribed Form 3372, Michigan Sales and Use Tax Certificate of Exemption.  The buyer or lessee would check the box "Rolling Stock purchased by an Interstate Motor Carrier".
  • I sold/purchased a vehicle from a relative.  Is tax due on this transaction?
    • An exemption from use tax may be claimed when registering your vehicle in Michigan if “buyer” and “seller” have a qualifying family relationship.

      The ONLY qualifying relationships are: spouse, parent (natural or adoptive), brother or sister, child (natural or adopted), grandparent or grandchild, step relationship, legal ward or legally appointed guardian, and in-laws.  Please refer to Form 248, Transferring a Vehicle Title to a Relative, for further information.
  • Is a vehicle purchase for a church tax exempt?
    • ONLY vans or buses may be purchased exempt if the manufacturer's rated seating capacity is 10 or more and it is used primarily for transportation of persons for religious purposes. Churches may not purchase any other type of vehicle exempt.
  • Is manufacturing equipment tax exempt?
    • Michigan provides an exemption from sales or use tax on machinery or equipment used in industrial processing and in their repair and maintenance.

      The exemption does not include tangible personal property affixed to and becoming a structural part of real estate.
      For further information on exemptions refer to Revenue Administrative Bulletin 2000-4.
  • Are purchases made for agricultural production tax exempt?
    • Michigan provides an exemption from sales or use tax on tangible personal property used in tilling, planting, caring for or harvesting things of the soil, in the breeding, raising or caring of livestock poultry or horticultural products for further growth.

      The exemption does not include tangible personal property affixed to and becoming a structural part of real estate. 

FAQs for Sales Tax Licenses

  • Is there a fee for a sales tax license?
    • No.
  • Who needs a sales tax license?
    • Individuals or businesses that sell tangible personal property to the final consumer.
      Click here for more information.
  • I am a wholesaler, do I need a sales tax license?
    • No.  Michigan does not issue sale tax licenses to wholesalers.   In order to claim exemption, a wholesaler must provide the seller with a completed Form 3372, Michigan Sales and Use Tax Certificate of Exemption, and indicate the purchase is for “Resale at Wholesale”.
  • How do I register to get a sales tax license?
    • Michigan Business One Stop is a fast, easy and secure way to register a business for taxes in the State of Michigan. It also allows you to perform a variety of tasks to start and operate a business, including applying for permits and licenses.
    • You may obtain a Michigan sales tax license by completing Form 518, Registration for Michigan Taxes.  Additional registration information for the application process can be found by visiting the Michigan Registration web page.
  • My current sales tax license expires on September 30, 2015.  Will a new one be mailed to me prior to the expiration?
    • You will be able to access your new sales tax license under the Correspondence tab on MTO as we approach the 09/30/2015 expiration date.
  • Do I need a sales tax license if I make retail sales as a couple of times a year?
    • If you make retail sales at only one or two events in Michigan per year, you may complete the Form 5089, Concessionaire’s Sales Tax Return and Payment.  If you prefer to obtain a sales tax license you make complete Form 518, Registration for Michigan Taxes.

FAQs for Construction

  • Are materials purchased for the construction of a building that will be owned by a tax-exempt entity subject to tax?
    • The only exemption provided in the Sales and Use Tax Statutes for contractors purchasing materials is when materials are affixed and made a structural part of real estate for a qualified nonprofit hospital or a nonprofit housing entity qualified as exempt under the Sales and Use Tax Acts, made a structural part of a sanctuary for a church, or is a component part of an air or water pollution facility for which a tax exemption certificate has been issued by the State Tax Commission.  Please refer to Revenue Administrative Bulletin (RAB) 1999-2.

      A completed Form 3520, Michigan Sales and Use Tax Contractor Eligibility Statement, must be obtained by the contactor from the qualified entity.   Form 3520, in addition to Form 3372, Michigan Sales and Use Tax Certificate of Exemption, is required for the contractor to make tax exempt purchases.  

FAQs for General Sales and Use Tax

  • Do I need to register for use tax?
    • A person that performs any of these activities must register for use tax.
  • Are delivery, shipping or handling charges taxable?
    • Yes, delivery or shipping charges incurred prior to transfer of ownership of tangible personal property are subject to tax. Handling charges are a part of gross proceeds and are taxable. When a customer is billed for delivery or shipping and handling as a combined total, the total charge is taxable.
  • Can I get a refund of my sales tax when I return an item to the retailer?
    • Yes, when items are returned for a credit or refund for all or a portion of the purchase price within the time period in the seller's refund policy or 180 days after the initial sale, whichever is sooner. The seller shall also refund or provide a credit for the sales tax. The retailer may request proof of Michigan tax paid.
  • I paid tax to another state/country on items purchased there.  Is use tax still owed to Michigan?
    • Yes. Michigan allows credit of up to 6% sales or use tax properly paid to another state or local unit of that state. Michigan does not have a provision for credit of purchases delivered or brought into Michigan from foreign countries or U.S. Territories.
  • Can a customer tell a seller not to charge sales or use tax because they will pay it directly to Michigan?
    • Yes, if a customer provides a copy of their direct pay permit authorized by the Michigan Department of Treasury to pay tax directly to the State.
  • Why do some out-of-state businesses collect use tax when other businesses do not?
    • Michigan can require a business to remit sales tax or collect and remit use tax if the business has a physical presence in this state. Examples of a presence in a state would be a store, warehouse, or employees or representatives of the business. They may also volunteer to collect and remit use tax for sales in Michigan. For transactions occurring on or after October 1, 2015, an out-of-state seller may be required to remit sales or use tax on sales into Michigan. See Notice of New Sales and Use Tax Requirements for Out-of-State Sellers.
  • Why is the use tax sometimes referred to as the remote sales tax?
    • Use tax is generally applied to purchases from an out-of-state remote seller of merchandise made through catalogs, telephone orders or the Internet.

      Note: Some entities doing business in multiple states may be interested in Streamlined Sales Tax (SST). The purpose of the SST Agreement is to simplify the burden of tax compliance.
      Click here for more information.
      Register here for Streamlined Sales Tax.
  • What are the historical prepaid sales tax fuel rates?
     

    Date

    Gasoline monthly prepaid sales tax rates (in cents)

    Diesel fuel monthly prepaid sales tax rates (in cents)

    09/01/2015

    14.6

    15.1

    08/01/2015

    15.0

    15.4

    07/01/2015

    13.8

    15.2

    06/01/2015

    12.6

    14.9

    05/01/2015

    12.4

    15.5

    04/01/2015

    11.8

    15.3

    03/01/2015

    10.0

    16.2

    02/01/2015

    12.6

    19.6

    01/01/2015

    15.6

    21.5

    12/01/2014

    16.8

    20.3

    11/01/2014

    18.7

    20.8

    10/01/2014

    18.8

    21.1

    09/01/2014

    19.6

    21.5

    08/01/2014

    21.0

    21.7

    07/01/2014

    20.2

    22.0

    06/01/2014

    20.2

    22.4

    05/01/2014

    19.9

    23.0

    04/01/2014

    18.4

    23.0

    03/01/2014

    17.7

    21.4

    02/01/2014

    17.2

    21.4

    01/01/2014

    17.4

    21.4

    12/01/2013

    18.2

    21.6

    11/01/2013

    19.2

    22.0

    10/01/2013

    19.3

    21.5

    09/01/2013

    19.9

    21.5

    08/01/2013

    21.1

    22.0

    07/01/2013

    20.8

    22.2

    06/01/2013

    20.5

    21.9

    05/01/2013

    20.0

    22.5

    04/01/2013

    20.4

    22.7

    03/01/2013

    18.1

    NA

    06/01/2012

    20.5

    NA

    03/01/2012

    17.9

    NA

    09/01/2011

    21.3

    NA

    06/01/2011

    17.6

    NA

FAQs for Internet Purchases

  • Is my mail order or internet purchase subject to tax?
    • Yes, unless a valid exemption applies.  Every state with a sales tax has a companion tax for purchases made outside the state. In Michigan, that tax is called the "use tax." Use tax is required by law when a person purchases a good from out of state and the retailer hasn't charged sales tax in their jurisdiction.

      In addition, for transactions occurring on or after October 1, 2015, an out-of-state seller may be required to remit sales or use tax on sales into Michigan. See Notice of New Sales and Use Tax Requirements for Out-of-State Sellers.

      Remote sales are made up of traditional mail order or catalog sales and e-commerce completed using the Internet.