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Michigan Taxes

Tax Summary

Corporate Income Tax 6.00%
Personal Income Tax 4.25%
Michigan Property Tax (Industrial Businesses) Cut by 65%
Michigan Property Tax (Commercial Businesses) Cut by 23%
Michigan Sales Tax 6.00%
Inventory Tax 0%

Corporate Income Tax - 6.00%

Michigan levies a Single Business Tax (SBT), which is a modified value-added tax (VAT). The rate is 6.00% and there is an additional modified gross receipts tax at a rate of .8%. For 2015, The Tax Foundation ranked Michigan's corporate tax as 10th best in the nation, up from 49th in 2012.

Personal Income Tax - 4.25%

Michigan's personal income tax rate is one of the lowest in the nation - a flat 4.25% tax rate that is scheduled to decline in the next few years.

Michigan Property Taxes - 65% / 23%

While tax rates vary by location, Michigan's property tax system provides automatic exemptions that effectively cut personal property taxes by:

  • 65% for industrial businesses
  • 23% for commercial businesses

Michigan's 2012 average non-homestead property tax rate was 49.54 mills, or $49.54 per $1,000 of assessed property, with real and personal property subject to taxation at 50% of current market value. Industrial personal property is automatically exempt from 24 mills for schools, and commercial personal property is exempt from 12 mills.

Michigan’s Sales Tax - 6%

The state sales tax is 6% on sales of tangible goods. No local sales taxes are allowed.

Tax Exempt Purchases

There is no state sales tax charged on:

  • Manufacturing machinery and equipment
  • Electricity and natural gas used in production
  • Pollution control equipment

Inventory Tax - 0%

Michigan has no inventory tax. 

Additional property tax abatements available to Michigan businesses include:

  • Locally-negotiated abatements, including 100% new real property exemptions available in specified communities
  • 50% abatements for up to 12 years on real property for industrial processors and high-tech companies

In 2014 Michigan reformed its personal property taxation:

  • Small taxpayer exemption - all industrial and commercial personal property owned by a business is exempt if the combined true cash value is less than $80,000
  • Eligible for exemption - Eligible Manufacturing Personal Property (EMPP) used at least 50% of the time in industrial processing or direct integrated support of industrial processing

To learn more about all of our incentive and financing programs or to develop an incentive package tailored to your needs, contact us.