Michigan charges a 6 percent sales tax on most goods, with some exceptions for food and services
Michigan's statewide sales tax rate is 6 percent. This tax applies to the purchase price of tangible goods — things you can touch and take home. When you buy a shirt, a phone, or a piece of furniture in Michigan, the store adds 6 percent to your bill at checkout.
Some items are taxed differently or not taxed at all. Groceries and prescription medications are exempt from sales tax. Most services — haircuts, car repairs, plumbing work — are not subject to sales tax either. A few categories fall into gray areas depending on what exactly you are buying and how it is sold.
Some cities and counties add their own local sales tax on top of the state rate. Your total sales tax can range from 6 percent (state only) to as high as 8 percent or more in certain areas. The rate depends on where you make the purchase, not where you live.
Key Takeaways
- Michigan's base sales tax is 6 percent on most goods, applied at the point of sale.
- Groceries, prescription drugs, and most services are not subject to sales tax in Michigan.
- Local jurisdictions can add their own sales tax on top of the state rate, so your total rate varies by city or county.
- The tax you pay is determined by the location where you make the purchase, not your home address.
- Online purchases from out-of-state sellers may or may not include Michigan sales tax depending on the seller's policies and nexus in the state.
What is and is not taxed in Michigan
The 6 percent tax applies to clothing, electronics, furniture, appliances, books, toys, and most other retail goods. It also applies to prepared food — restaurant meals, deli items, and food from a hot bar. If you can pick it up and carry it out, it is almost certainly taxed.
Groceries meant for home preparation are exempt. This includes raw meat, produce, bread, milk, canned goods, and frozen vegetables. The distinction is whether the food is ready to eat or requires cooking. A rotisserie chicken from a grocery store deli is taxed; a raw chicken from the meat counter is not.
Prescription medications filled by a licensed pharmacist are not taxed. Over-the-counter medicines like aspirin or cold medicine are taxed as regular goods. Medical devices and equipment vary — some are exempt, others are not, depending on their classification.
Services generally escape sales tax. You do not pay sales tax on labor for repairs, haircuts, dental work, or professional services. However, if a service includes a taxable product — like a plumber who charges you for both labor and parts — the parts portion may be taxed.
How local sales tax adds to the state rate
Michigan allows cities, villages, and counties to impose their own local sales tax in addition to the 6 percent state rate. These local rates vary widely and can range from 0 to 2 percent or more depending on the jurisdiction.
Your total sales tax is the sum of state and local rates. In some areas, you might pay exactly 6 percent. In others, you could pay 7, 7.5, or 8 percent. The rate that applies is the one in effect at the location where you complete the purchase — the store's address, not yours.
If you shop near a border, you might notice different rates on either side. This is because each jurisdiction sets its own local rate. Some people deliberately cross borders to shop in lower-tax areas, though the difference is usually small.
Sales tax on online and out-of-state purchases
When you order from an online retailer, whether the seller collects Michigan sales tax depends on whether they have a physical presence or significant business activity in Michigan. Large retailers like Amazon typically collect sales tax on Michigan orders. Smaller sellers or those based outside Michigan may not.
If a seller does not collect sales tax at checkout, you may owe use tax — a tax on goods you bring into Michigan or have delivered here. Use tax is the same rate as sales tax but is your responsibility to report and pay. In practice, most individuals do not report use tax on personal purchases, though technically it is owed.
The rules around online sales tax have changed significantly in recent years as states have pushed for broader collection. If you are unsure whether you owe tax on a specific purchase, the safest approach is to check the seller's tax policy or contact the Michigan Department of Treasury.
Who collects and where the money goes
Retailers collect sales tax from customers at the point of sale and remit it to the Michigan Department of Treasury. The state keeps the 6 percent portion and distributes the local portion to the city, village, or county where the sale occurred.
Sales tax revenue funds state and local government operations — schools, roads, public safety, and other services. The distribution formula varies by jurisdiction, and some local governments depend heavily on sales tax revenue.
Frequently Asked Questions
Do I pay sales tax on clothing in Michigan?
Yes. Clothing is taxed at the full 6 percent state rate, plus any local sales tax. There is no clothing exemption in Michigan, unlike some other states.
Is restaurant food taxed differently than grocery store food?
Yes. Restaurant meals and prepared foods are taxed at 6 percent. Groceries you buy raw and cook at home are not taxed. The key is whether the food is ready to eat or requires preparation.
What if I buy something online from a company outside Michigan?
Large online retailers collect Michigan sales tax. Smaller sellers may not. If they do not, you technically owe use tax, but this is rarely enforced for personal purchases. Check the seller's tax policy at checkout.
Does the sales tax rate change by city?
The state rate is always 6 percent, but cities and counties add their own local tax on top. Your total rate depends on where you make the purchase. Some areas have 6 percent total; others have 7 or 8 percent.
Are prescription drugs taxed?
No. Prescription medications filled by a licensed pharmacist are exempt from sales tax. Over-the-counter medicines like aspirin or cough syrup are taxed as regular goods.