Key figures
Michigan receivables
2026, with sources
Nexus and a single rate
A remote seller has Michigan sales tax nexus if, in the previous calendar year, it made over $100,000 of gross sales or 200 or more separate transactions with Michigan customers. Michigan still counts transactions. Once registered, the seller collects a single 6% rate statewide — there are no local sales taxes — and files monthly, quarterly or annually as Treasury assigns, with an annual return on Form 5081.
Consider a SaaS company selling a $15-a-month plan. It reaches 200 Michigan transactions with about 17 customers on monthly billing, long before $100,000 of sales — so even if the core product is not taxable, it should confirm that nothing it sells to those customers (a downloadable client, a hardware add-on) is, because the transaction count gives it nexus either way.
SaaS versus delivered software
Michigan taxes prewritten computer software as tangible personal property. Since the Michigan Court of Appeals’ Auto-Owners decision, Treasury has treated remote access to software, where nothing is delivered to the customer, as not taxable. The line is the delivery of code: a browser-only product is generally outside the tax; one that installs an agent or desktop client on the customer’s machine may be inside it, depending on whether the download is incidental to the service.
A SaaS company that ships a downloadable component for Michigan customers should decide where its product sits before it crosses the nexus threshold, because 200 transactions arrive quickly.
Receipts and the CIT
Revenue from Michigan customers also drives the CIT. Services are sourced to where the customer receives the benefit, and once apportioned or allocated gross receipts reach $350,000 a corporation with Michigan nexus files a CIT return. A SaaS company with no Michigan office can reach that line on sales alone.
The federal baseline
This page covers what Michigan adds. The federal rules underneath it apply here too.
Common questions
Is our SaaS taxable in Michigan?
Pure SaaS, accessed remotely with nothing delivered, generally isn’t. Michigan taxes prewritten software that is delivered to the customer, so a product with a downloadable desktop client, or a license to install code, can be taxable. Where both are bundled, Michigan looks at whether the download is incidental to the service.
Which rate do we charge Michigan customers?
A single 6% rate. Michigan has no city or county sales taxes, so a remote seller collects the same rate everywhere in the state, which makes Michigan one of the simpler states to collect in once nexus is reached.
Receivables next door
- INIndiana receivablesIndiana charges a flat 7% with no local rates, counts only $100,000 of sales toward nexus since 2024, and doesn’t tax remotely accessed SaaS.
- OHOhio receivablesOhio taxes SaaS used in business at 5.75% plus local rates, and the 200-transaction test still counts toward nexus.
- WIWisconsin receivablesWisconsin charges 5% plus county and Milwaukee city rates, counts only $100,000 of sales toward nexus, and doesn’t tax SaaS hosted on the vendor’s servers.
Founder guides on this
- Sales taxSales tax nexus for startups: when you owe tax in a stateSince Wayfair, selling into a state can create a sales tax obligation. How economic nexus works, why SaaS is taxable in some states and when to register.
- RevenueDeferred revenue for SaaS startups, explainedAn annual prepayment is cash today and revenue over a year. How deferred revenue works under ASC 606, why it’s a liability, and the schedule behind it.
- StripeHow to reconcile Stripe payouts to your booksA Stripe payout is charges less fees, refunds and disputes, batched across days. How to book it gross, tie it to the bank, and keep revenue right.
More of the Michigan guide
- AccountingAccounting and state tax in MichiganCorporate tax, conformity to federal rules, apportionment and what it does to your books
- PayablesPayables and contractors in MichiganPaying vendors and contractors: 1099 filing, use tax, contractor tests and withholding
- PayrollPayroll taxes and employer rules in MichiganWithholding, unemployment insurance, paid leave, minimum wage and the rules on paydays
- ComplianceCompliance and filings in MichiganRegistering to do business, annual reports, franchise tax and the filing calendar
- AdvisoryAdvisory: credits and decisions in MichiganCredits, incentives and the decisions that are cheaper to get right the first time
Sources
Checked against each agency’s own page on . Rates and thresholds change, usually on January 1.
General information for US companies, not tax, legal or accounting advice for yours. Rules and thresholds change; confirm the specifics with a CPA or the agency before you act on them.