2024 Guide to Sales Tax in Detroit, Michigan

What is the Sales Tax in Detroit?

Detroit has a combined sales tax rate of 6.00%. The breakdown is as follows:

• The Michigan state sales tax rate: 6.00%
• Wayne County sales tax rate: 0.00%
• Detroit city sales tax rate: 0.00%
• Special sales tax rates: 0.00%

What is Wayne County Sales Tax?

Wayne County does not impose an additional sales tax. Therefore, the total sales tax rate in Detroit remains 6.00%, which is the state rate.

Tax Rates in Detroit, Michigan

Curious about the variation in sales tax rates in Detroit? Here’s a breakdown of the sales tax rates for the top 10 zip codes in Detroit:

Other Tax Rates for Detroit

In addition to the main tax rates, here are some other tax rates that might apply to your business in Detroit:

What Items are Taxable in Detroit?

In Michigan, not all items are subject to sales tax. For example, certain groceries and medical products may be exempt. To ensure you’re charging the correct tax, consider adding a Tax Information Code (TIC) to each item you sell. A TIC is a unique identifier that categorizes goods or services.

Here are some examples of taxable items in Detroit:

What Items are Exempt from Taxes in Detroit?

Michigan exempts several items from sales tax to encourage their purchase or because they are deemed essential. To avoid mistakenly charging tax on exempt items, apply a Tax Information Code (TIC) to each of these products.

Here is a list of some tax-exempt items in Detroit:

Who Needs to Collect Sales Tax in Detroit?

Businesses must collect sales tax in Detroit if they have either a physical presence (nexus) or an economic nexus in Michigan.

What is Physical Nexus in Michigan?

Physical nexus in Michigan means that your business has some kind of physical presence in the state. This can include having an office, warehouse, employees, or a significant amount of inventory within the state.

What is Economic Nexus in Michigan?

If your business doesn’t have a physical presence in Michigan, you can still be required to collect sales tax if you exceed the economic nexus threshold. This is defined as making $100,000 in sales or 200 transactions in the state within a year.

How you qualify for economic nexus in Michigan (full details):

• Count all sales into Michigan, including wholesale transactions, toward your $100,000 sales threshold or 200 transactions.
• Sales made through a marketplace where the facilitator collects tax on your behalf do not count toward the threshold.
• Once you reach the threshold, you must register for sales tax in Michigan and begin collecting and remitting the appropriate taxes.

How to Get a Sales Tax Permit in Detroit?

If your business meets the physical or economic nexus criteria, you’ll need to obtain a sales tax permit in Michigan. This process is simple and free.

Here are the steps:

1. Visit the Michigan Department of Treasury website.
2. Complete the online registration form with details about your business.
3. The system will identify the necessary permits and register you for them.
4. You’re all set!

For more information, refer to the Michigan Department of Treasury’s Sales Tax website.

How Do You Charge the Right Amount for Sales Tax in Detroit?

Ensuring you charge the correct sales tax in Detroit can be challenging due to potential rate changes and differing rates across regions. Here’s how to stay compliant:

1. Manually update rates: Keep track of changes by regularly checking the Michigan Department of Treasury’s website. This approach requires updating your ecommerce platform frequently to ensure accurate tax rates.
2. Use sales tax software: Automate the process with sales tax compliance software like TaxCloud. These tools update rates automatically across all jurisdictions, saving you time and reducing errors.

How Do You File and Remit Sales Tax in Detroit?

Do you need to file sales tax returns specifically for the city of Detroit or Wayne County? No, you don’t. If you have sales tax nexus in Michigan, you collect sales taxes from across the state and file a single state-wide return. The Michigan Department of Treasury will process the returns.

If filing Michigan sales taxes is time-consuming for you, TaxCloud can help. Our platform automates the entire sales tax management process, from tracking nexus and registering for sales tax to filing returns. With TaxCloud, you can focus on growing your business while we handle your sales tax compliance.

Learn how TaxCloud can simplify sales tax for your business.