Knowing the required taxes within your state is essential for all business owners. In Michigan there are tax laws that offer credits and adjustments for small business owners, and unfortunately other laws that create a cost you can just do without. Here is a list that include some of the good and bad tax laws in Michigan.
Michigan Corporate Income Tax – Michigan has a 6 percent corporate income tax rate, one of the lowest nationwide. The good part for small business owners is that it includes a small business alternative credit, which provides an alternate tax rate of 1.8 percent of adjusted business income.
Michigan Sales Tax – There is a 6 percent state sales tax in Michigan on all retail sales. However, unlike some other states, Michigan does not allow local or city units to impose an additional sales tax. As a business owner in Michigan, you are also required to obtain a sales tax license if you are selling personal tangible property.
Small Business Health Care Tax Credit – Through the Affordable Care Act (Obamacare), an employer with less than 25 full-time employees may qualify for the Small Business Health Care Tax Credit. You can receive a credit of up to 50 percent of your contribution toward your employees’ healthcare premium costs and up to 35 percent for tax-exempt employers.
Use Tax – Michigan has a 6 percent use tax, which is paid to the state of Michigan on the total price, including shipping and handling charges, of all taxable items brought into Michigan. This includes purchases through the internet, mail and phone orders from out-of-state retailers that do not collect and remit sales or use tax. Almost every business in Michigan has a use tax liability.
More information on Michigan’s tax laws can be found at Michigan.gov.
This article was written by T. Marie Adams for Small Business Pulse