Michigan is made up of two large peninsulas in the north of the country, with Lake Michigan between them. Thanks to its place on the Great Lakes, the "Great Lakes State" has the longest freshwater coastline of any US state. An unusually large share of its 250,000 km², a good 40 percent, is covered by water. Detroit is the largest city, home to a good 700,000 of Michigan's almost ten million residents.
Businesses thrive in this globally connected state thanks to a business-friendly environment that ranks among the best in the nation. Michigan has a culture of innovation and a lifestyle unlike any other.
In fact, Michigan is one of the top 3 states for foreign direct investment, and according to Site Selection magazine, Detroit is the number one metro area for foreign direct investment projects. German companies account for the second-largest share of that foreign investment.
A globally accessible location
Almost half of the US and Canadian population lives within 800 kilometers. That gives Michigan excellent access to consumers and to a wide range of trade hubs.
More than a quarter of the over $700 billion in annual trade between the United States and Canada crosses the Ambassador Bridge, making it the busiest border crossing in North America.
Michigan's 33 active deep-water ports are complemented by 18 commercial airports, including Detroit Metropolitan, one of North America's largest air hubs. Importing into and exporting from Michigan worldwide is easy.
Mobility and car making are everywhere
Mobility and car making have deep historic roots in Michigan. The global auto industry has its past here, its present, and very likely its future too.
Michigan is home to almost 19 percent of all US vehicle production, more than any other state. The Great Lakes State is also number 1 in automotive and mobility research, with 73% of total US spending made here. 18 of the world's largest OEMs (original equipment manufacturers), 96 of the top 100 suppliers and a wealth of mobility tech companies call it home.
Michigan has the most extensive network of test infrastructure for autonomous vehicles and mobility, and the friendliest laws in the country for testing self-driving cars. It also has the nation's highest concentration of engineers and designers, and of automotive jobs, manufacturers and suppliers.
A huge talent pool
The MEDC (Michigan Economic Development Corporation) is committed to growing a highly skilled workforce. To get there, it works with agencies across Michigan to prepare workers for the demands of business in the 21st century.
Michigan's world-class talent is one of the main reasons companies choose to set up or expand here. Employers rate the local talent pool among the most skilled, diverse and deep in the country. Not surprisingly, the state has one of the largest pools of skilled tradespeople, ideal for vehicle manufacturing.
Income tax in Michigan
Michigan levies a flat income tax of 4.25%. On top of that, federal income tax applies.
Corporate tax in Michigan
Michigan levies a corporate tax of 6%. On top of that, federal corporate tax applies.
Sales tax in Michigan
The USA has no VAT on the European model. Instead, states, counties and municipalities levy a local sales tax on the sale of goods (but not services).
Sales tax rate in Michigan
Michigan's sales tax is 6% at state level. Cities and counties do not levy sales tax.
Michigan nexus laws & sales tax
Learn more about economic nexus laws and sales tax.
Effective date
After September 30, 2018
Included transactions:
Sales of tangible personal property or taxable services delivered into the state
Treatment of exempt sales:
Exempt sales and exempt services count toward the threshold
Trigger:
Sales or transactions
Sales/transaction threshold:
$100,000 or 200 transactions
Evaluation period:
The threshold applies to the previous calendar year
Additional information:
- Registration requirements: Michigan requires a remote seller to register to collect and remit sales tax by the start of the calendar year after the threshold is exceeded.
- Information for remote sellers
- RAB 2018-16
Michigan marketplace sellers & sales tax
Learn more about registration requirements for marketplace sellers
Effective date for marketplace facilitators:
January 1, 2020
Economic nexus threshold:
More than $100,000 in taxable or non-taxable sales or at least 200 transactions in the state in the previous calendar year. When calculating the threshold:
- Remote sellers should include direct sales and sales made through a marketplace
- Marketplace facilitators include all sales made through the marketplace
Registration requirements:
- Remote multichannel sellers:Once you exceed the economic nexus threshold, you must register with the Michigan Department of Treasury (DOT) and collect Michigan sales tax on sales not taxed by a marketplace facilitator.
- Remote marketplace sellers:You do not need to register or collect Michigan sales tax, even if you exceed the economic nexus threshold.
- In-state multichannel sellers:You must register with the Michigan DOT and collect tax on sales not taxed by a marketplace facilitator.
- In-state marketplace sellers:You do not need to register. Contact the Michigan DOT for more information.
- Learn more here and here.
Compare all 50 states in our overview of the US states, and get started with our guide to forming a company in the USA.
Our services for Michigan:
Whether your Michigan business needs its own US company, and which state it should be in, is something we work out together in a consultation. Entity types, options and fees are under US Company Formation.