Michigan's Remote and Online Seller Tax Laws

Learn about the remote seller tax rules for Michigan.

Michigan is one of a number of states that has enacted regulations that allow the state to collect sales tax from online retailers who sell to Michigan customers, regardless of whether the seller has a physical presence in the state. These regulations were made possible after the Supreme Court's decision in South Dakota v. Wayfair Inc., overturning a long established rule that states could only require retailers with a physical presence in the state to collect sales tax from sales to customers located in their state.

New Rules on Collecting Sales Tax for Remote Sellers

Effective October 1, 2018, remote sellers whose sales in Michigan exceed certain thresholds must register with the state, collect sales tax, and remit the tax to the state. Remote sellers are any sellers that sell tangible personal property through the Internet, catalogs, mail order, or any other similar method.

Under the new rules, remote sellers must register with the state and collect Michigan sales tax once their sales into Michigan in the previous calendar year exceed:

  • $100,000 (including both taxable and non-taxable sales), or
  • 200 separate transactions (including both taxable and non-taxable sales).

Once a seller meets either of the above thresholds, the seller must register with the state and begin collecting sales tax. Remote sellers must review their 2017 sales to determine if they are required to collect sales tax on sales made on or after October 1, 2018. A remote seller who sells through a marketplace also is required to register and pay tax unless the marketplace is already paying the tax. A remote seller who is required to start collecting and remitting sales tax is not allowed to stop unless a calendar year passes when the above thresholds no longer are met.

How to Register and Collect Sales Tax

Remote sellers in Michigan can register and collect sales tax through the Streamlined Sales and Use Tax (SST) Registration System. Michigan is one of roughly two dozen states that participate in the SST system. If you register under SST, you can file monthly Simplified Electronic Returns (SERs), remit monthly payments, and you will not need to file an annual reconciliation return. Once registered, you will receive a letter containing filing and payment information. Alternatively, you can register directly with the state by going to the Michigan Treasury Online Help Center, choosing Access MTO, and creating an online account.

For more information, see the Michigan Department of Treasury website and these two FAQ pages. Also be sure to check for additional information at: www.michigan.gov/remotesellers.

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