Michigan charges a 6 percent sales tax on most retail purchases, with some exceptions

Michigan's sales tax rate is 6 percent statewide. This tax applies to the sale of tangible goods — physical items you can touch and take home. When you buy clothing, groceries, furniture, or electronics at a store, the retailer adds 6 percent to your bill at checkout. The retailer then sends that money to the Michigan Department of Treasury.

Some purchases are taxed at a different rate or not taxed at all. Food you prepare at home, prescription medications, and certain medical equipment are exempt. Services — like haircuts, car repairs, or accounting work — are generally not subject to sales tax in Michigan, though there are exceptions. Understanding which purchases are taxed and which are not helps you budget accurately and know what to expect when you pay.

Key Takeaways

  • Michigan's base sales tax is 6 percent on tangible goods, applied at the point of sale by the retailer.
  • Groceries, prescription drugs, and most medical devices are exempt from sales tax in Michigan.
  • Services such as repairs, haircuts, and professional consultations are not subject to sales tax unless they involve a taxable product.
  • Some counties and cities in Michigan do not add a local sales tax, while others add up to 2 percent on top of the state rate.
  • Retailers are responsible for collecting sales tax and remitting it to the state; you do not file sales tax yourself as a consumer.

What items are subject to the 6 percent tax

Sales tax in Michigan applies to most tangible personal property — anything physical that you purchase and own. Clothing, shoes, furniture, appliances, electronics, toys, books, and sporting goods all carry the 6 percent tax. Gasoline, diesel fuel, and other motor fuels are taxed at the point of sale. Prepared food — meals from restaurants, takeout, and food from a deli counter — is taxed, but unprepared food you cook at home is not.

Digital products and software licenses fall into a gray area. Downloaded software, e-books, and digital subscriptions may or may not be taxed depending on how they are classified and whether they are considered a service or a product. If you are unsure whether a specific purchase will be taxed, ask the retailer before you buy. Many retailers can tell you when ready whether an item is taxable.

What is exempt from sales tax in Michigan

Groceries and food you prepare at home are not subject to sales tax. This includes bread, milk, vegetables, meat, cereal, and other items you would find in the grocery section of a supermarket. The exemption does not explore to prepared foods, alcohol, or items from a restaurant or deli counter.

Prescription medications and certain medical devices are exempt. This includes insulin, inhalers, diabetic testing supplies, and other items prescribed by a doctor. Over-the-counter medications like aspirin or cold medicine are taxed. Medical equipment such as wheelchairs, walkers, and hearing aids may be exempt if they meet specific criteria — check with the retailer or the Michigan Department of Treasury if you are unsure.

Services are generally not taxed. A haircut, car repair, plumbing work, or accounting consultation does not carry sales tax. However, if a service involves selling you a taxable product as part of the work — such as parts installed during a repair — the parts themselves may be taxed.

Local sales tax rates vary by county and city

Michigan's 6 percent state sales tax is the floor, not the ceiling. Some counties and cities add their own local sales tax on top of the state rate. Local rates range from 0 percent to 2 percent, depending on where you live and shop. This means your total sales tax could be anywhere from 6 percent to 8 percent.

The local rate depends on your location at the time of purchase. If you buy something in Detroit, you pay Detroit's local rate. If you buy the same item in a nearby township with no local tax, you pay only the state rate. Online purchases are more complicated — the tax rate depends on where the seller is located and where the item is shipped. Check your receipt to see the exact rate charged, or contact your local tax assessor's office to learn what rate applies in your area.

How sales tax is collected and who pays it

The retailer collects sales tax at the point of sale and is responsible for sending it to Michigan. You do not file sales tax yourself as a consumer — the store handles all of that. When you see a price tag that says $10, and the register shows $10.60, that extra $0.60 is the 6 percent sales tax (or higher if your area has a local tax). The retailer keeps track of all sales tax collected and remits it to the state on a schedule set by the Michigan Department of Treasury.

If you own a business and sell taxable goods, you must register for a sales tax permit and collect tax from your customers. Business owners file sales tax returns with the state, usually monthly or quarterly depending on sales volume. As a consumer, your only responsibility is to pay the tax shown on your receipt.

Sales tax on online and out-of-state purchases

Online retailers must collect Michigan sales tax if they have a physical presence in the state or meet certain sales thresholds. Large online retailers like Amazon collect and remit Michigan sales tax automatically. Smaller sellers or those based outside Michigan may not collect tax at checkout, but Michigan law requires you to pay use tax on those purchases when you file your state income tax return.

Use tax is Michigan's way of ensuring that purchases made outside the state are taxed the same way as in-state purchases. If you buy something online from a seller who does not collect Michigan tax, you owe use tax equal to what you would have paid in sales tax. Most individual consumers do not track and report use tax, but it is technically required. If you run a business, you must track use tax carefully and report it accurately.

Frequently Asked Questions

Is sales tax included in the price shown on the shelf?

No. Prices on shelf tags and price stickers in Michigan do not include sales tax. The tax is added at checkout. This is why the amount you pay is higher than the advertised price.

Do I pay sales tax on groceries in Michigan?

Unprepared groceries — items you cook at home like vegetables, meat, bread, and milk — are not taxed. Prepared food from a restaurant, deli counter, or takeout is taxed at 6 percent (or higher with local tax).

What is the difference between sales tax and use tax?

Sales tax is collected by the retailer when you buy something in Michigan. Use tax is what you owe on purchases made outside Michigan or from online sellers who do not collect tax. Both are owed to Michigan, but use tax is your responsibility to report.

Do I pay sales tax on services like haircuts or car repairs?

No. Services are not subject to sales tax in Michigan. However, if the service includes selling you a taxable product — like parts installed during a repair — those parts may be taxed separately.

Can I get a sales tax refund if I buy something and return it?

Yes. When you return an item and receive a refund, the retailer refunds the sales tax as well. The refund appears on your receipt or credit card statement as a credit.