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Michigan State Taxes


State Income Taxes in Michigan

The state of Michigan does have an individual income tax. Unlike most states with income tax, it is calculated as a flat percentage of 4.25% of the Federal adjusted gross margin (AGI) for 2020 (this does not include additional local income taxes that may be imposed by cities in Michigan).

State Business Taxes in Michigan

The state of Michigan has a flat Corporate Tax rate of 6.00%. For other business entities that are flow-thru entities, such as S Corporations, Partnerships, LLCs, etc., they are taxed the individual income tax rate of 4.25%

Property and Sales Taxes in Michigan

Sales Tax – unlike many other states Michigan has a single sales tax rate, at the state level. The state rate is 6.00%

Property Taxes in Michigan – The average property tax rate for residential property in the state of Michigan is 1.44% making it more expensive than other states (the national median is 0.93%). The state of Michigan does have a homestead tax credit, if you meet certain requirements.

Unemployment taxes in Michigan

Unemployment taxes usually consist of three factors. They are the wage base, range of rates, number of schedules. Below is an outline of the three:

  • Wage Base – Michigan has a wage base of $9,000 for 2020
  • UI Rates – range from 0.78% to 12.77% which is very high for UI
  • Schedules – Michigan has multiple rate schedules regarding UI

Michigan Business Entities – LLCs

Michigan is an inexpensive state to open an LLC. Here are some important facts:

  • Michigan’s annual LLC fee at only $25.
  • When you register with the state, you pay a one time fee of $50
  • Secretary of State of Michigan website – click here

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