How to Register for a Sales Tax Permit in Michigan

Who Needs a Sales Tax Permit in Michigan

In Michigan, any business that sells tangible personal property or offers taxable services is required to collect and remit sales tax to the state. This applies to traditional retail stores, service providers, and online sellers alike. 

The economic nexus threshold in Michigan mandates that businesses with over $100,000 in sales or at least 200 separate transactions in the state must collect sales tax, even if they don’t have a physical presence there. 

Examples include a local boutique, a contractor providing taxable services, and an out-of-state e-commerce business exceeding the sales threshold.

Steps to Register for a Sales Tax Permit in Michigan

Follow these steps to register for a sales tax permit in Michigan. 

1. Prepare Your Documents

You will need to provide the following information: 

• Legal Business Name: Consistent with the name registered with the Michigan Department of Licensing and Regulatory Affairs.
• Business Address: A valid street address is required; P.O. boxes are generally not accepted.
• Federal Employer Identification Number (FEIN): Obtain this from the IRS if you haven’t already.
• Contact Information: Include phone numbers and email addresses for primary business contacts.
• North American Industry Classification System (NAICS) Code: This code identifies your business industry.
• Date of Business Commencement in Michigan: Indicate when your business operations started or will start in the state.

2. Register Online via the Michigan Treasury Online (MTO)

To register, visit the Michigan Treasury Online (MTO) portal, click on “Register a business”, provide all necessary information accurately, review your application, and submit it through the portal.

3. Wait for Approval

Upon registration, it typically takes 1-2 weeks to receive your account number. Once approved, you will be authorized to collect sales tax in Michigan.

Running a business while ensuring compliance can be challenging. doola’s Bookkeeping services can expedite the process, help manage the stress, guide you through all the steps, and ensure full compliance. 

Understanding Your Sales Tax Responsibilities in Michigan

In Michigan, businesses are required to file sales tax returns either monthly, quarterly, or annually, depending on their sales volume. The state imposes a 6% sales tax rate, with no additional local sales taxes. It’s important to understand the specifics of taxable goods and services in the state. Michigan also has exemptions, like sales to the federal government and certain nonprofit organizations, which can alter the way tax is collected.

Common Mistakes to Avoid

• Neglecting to register for a sales tax permit when necessary.
• Applying incorrect sales tax rates due to misunderstanding state requirements.
• Missing deadlines for filing returns, leading to possible penalties.
• Ignoring exempt sales and failing to document resale certificates properly.

How to Maintain Compliance & File Sales Tax Returns

To file sales tax returns in Michigan, use the MTO portal where you can submit your returns and remit payments online. Consider using automated solutions to ease tax collection and ensure accuracy. 

Keep in mind that doola can assist with your bookkeeping and tax needs, ensuring your business remains compliant with ease. 

FAQs About Sales Tax Permits in Michigan

How long does it take to get a sales tax permit? 

Typically, it takes around two to three weeks for the Michigan Department of Treasury to process a sales tax permit application.

Do I need to renew my sales tax permit? 

No, once a sales tax permit is issued in Michigan, it does not require renewal, provided compliance is maintained.

What happens if I cease business operations in Michigan? 

You must formally close your sales tax account by notifying the Michigan Department of Treasury.

Are online sellers compelled to collect sales tax in Michigan? 

Yes, if they surpass the $100,000 sales threshold or conduct at least 200 separate transactions, online sellers must collect Michigan sales tax.

Stay Compliant With doola 

Registering for a sales tax permit is crucial for any business operating in Michigan. Compliance requires understanding deadlines, correct tax collection, and knowing about available exemptions. 

Professional assistance can ensure everything is managed effectively. For financial solutions, doola offers guidance to ensure compliance, helping your business not just survive, but thrive. 

Be sure to visit the Michigan Department of Treasury for further information and resources.