Sales Tax Rules
Michigan imposes a state sales tax rate of 6%, with a maximum combined rate (state plus local) of 6% when local taxes are added. Economic nexus is triggered at $100,000 in sales or 200 transactions — meaning out-of-state businesses that exceed this threshold must collect and remit Michigan sales tax. SaaS and digital software products are generally exempt from sales tax in Michigan. Groceries are exempt from state sales tax.
SaaS Tax Details
SaaS is not taxable if the user does not have control over the software.
Grocery Details
Food and beverages for home consumption are exempt.
What is the sales tax rate in Michigan?
Michigan's state sales tax rate is 6%. When local taxes are added, the maximum combined rate can reach 6%. The actual rate you pay depends on the county and city where the purchase is made.
What is the economic nexus threshold in Michigan?
Michigan requires out-of-state businesses to collect sales tax once they exceed $100,000 in sales or 200 transactions in a calendar year. Once nexus is established, the business must register, collect, and remit Michigan sales tax.
Is SaaS taxable in Michigan?
No. SaaS products are generally exempt from sales tax in Michigan. SaaS is not taxable if the user does not have control over the software.
Are groceries taxed in Michigan?
Groceries are generally exempt from sales tax in Michigan. Food and beverages for home consumption are exempt.
Are digital goods taxable in Michigan?
Digital goods are generally exempt from sales tax in Michigan. However, tax law in this area evolves quickly — verify current rules with the Michigan Department of Revenue.
Are clothing items exempt from sales tax in Michigan?
Clothing is subject to sales tax in Michigan at the standard state rate.
How often do I need to file sales tax in Michigan?
Michigan requires sales tax filing on a Monthly, Quarterly, or Annual. Online filing is available through the official Department of Revenue portal.
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Official Source
Michigan Department of Revenue
Last verified: 2026-03-25 · Always confirm current rates with your tax advisor before filing.