Michigan Use Tax

Article ID: 33399  

Question
Michigan Use Tax

Answer

If you have paid the tax for your out-of-state purchases, answer yes to the question when asked in the interview. If you are unsure, read the following.

Every state that has a sales tax has a companion tax for purchases made outside that state, by catalog or over the Internet. In Michigan, that companion tax is called the "use tax," but might be described more accurately as a remote sales tax because it is a 6 percent tax owed on purchases made outside of Michigan.

You owe tax on purchases for "storage, use or consumption in Michigan of tangible personal property" from companies that do not collect Michigan sales or use tax. This includes mail order and Internet purchases as well as purchases while traveling in foreign countries and other states. You do not have to pay Michigan use tax if:

  • Michigan sales or use tax was paid to the seller, or
  • The seller charged another state's sales tax (including local sales taxes) of at least 6% on purchases, or
  • Purchases made outside Michigan in a calendar month did not exceed $10. If total purchases for the month exceed $10, then all purchases are subject to tax. Use tax must be paid on the total price (including shipping and handling charges) of all taxable items purchased from out-of-state retailers who do not collect Michigan tax.

Use tax must be paid on the total price (including shipping and handling charges) of all taxable items purchased from out-of-state retailers who do not collect Michigan tax.

Examples of Taxable Items The following are examples of purchases subject to use tax, only if you have not already paid a tax of at least 6%:

  • Internet, mail order, or out-of-state catalog purchases
  • Purchases made while traveling in another state and/or foreign country

Note: No credit is given for tax paid on purchases made in a foreign country. Use tax is owed when the item is brought into Michigan from any where else.


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Views: 853 Created on: Jun 15, 2013