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Who is required to register for use tax? A person who has any of the following activities must remit use tax. There is no cost for use tax registration. In order to register for use tax, please follow the application process.
Individuals and Businesses - Use tax on tangible personal property is similar to sales tax, but applies to purchases when Michigan sales tax is not
charged. Use tax of 6 percent must be paid on the total price (including
shipping and handling charges) of all taxable items brought into Michigan or
purchases by mail from out-of-state retailers. It applies to purchases made in
foreign countries as well as other states. Businesses registered for sales or
withholding tax may remit use tax on their returns. Individuals can pay their
use tax liability on their MI-1040 tax return. Additional information and
instructions on use tax for "Internet "Mail Order and Out-of-State
Purchases" may be found in the Michigan Income Tax Booklet.
Use tax is also due on vehicles, off-road-vehicles, mobile homes, aircraft,
snowmobiles, and watercraft purchased or transferred by an individual or
business from anyone who is not a licensed dealer or a retailer. Tax on
vehicles, ORVs, snowmobiles, and watercraft should be paid to the Secretary of
State prior to the transfer of the registration. Tax on mobile homes should be
paid to the Secretary of State at the point transfer of ownership takes place.
For transactions involving aircraft, tax should be paid to the Department of
Treasury. More information may be obtained on this topic in Revenue
Administrative Bulletins 1990-4 (Use Tax Base for Vehicles).
There is an exemption allowed for the purchase or transfer of these enumerated
items between spouse, mother, father, brother, sister, child, stepparent,
stepchild, stepbrother, stepsister, grandparent, grandchild, legal ward or a
legally appointed guardian with a certified letter of guardianship. Other
specific, less common exemptions are also allowed.
Out-of-state businesses - Businesses located outside of Michigan may
register to collect Michigan taxes for sales to Michigan residents. This is a
use tax registration. Michigan's use tax rate is six percent. This tax will be
remitted to the state on monthly, quarterly or annual returns as required by the
Rentals and Leases - A registered lessor in Michigan has the option of
paying six percent Michigan Tax on the acquisition of tangible personal property
that is to be leased in Michigan or to collect and remit six percent use
tax on the total rental receipts. Total rental receipts include all charges,
even though separately itemized by the lessor to the lessee, for the leased
property. The method chosen may not be changed for the entire life item.
Additional information can be found on this topic in
Telecommunications - Michigan Use Tax Act [MCL 205.93a(a) and (c) imposes
six percent use tax and authorizes the taxation of qualifying services provided
as part of telephone communications. TO the extent that the telephone
communication service (including cost of the service passed on the customer) is
intrastate-both originating and terminating in Michigan, fees/charges are
taxable. To the extent that the telephone communication is interstate in nature,
and either originates or terminates in Michigan and is billed to a Michigan
service address or telephone number, fees/charges are taxable unless they meet
certain statutory exemption criteria (i.e., wide area telecommunication service,
800 prefix service, an interstate private network, or an international call
either inbound or outbound).
Lodging - Use tax is due on rooms or lodging furnished by hotelkeepers,
motel operators, and other persons furnishing accommodations that are available
to the public on the basis of a commercial and business enterprise. No tax is
due if the room is rented for a continuous period of more than one month to the