use tax

Use tax is a tax imposed by state taxing authorities on the purchase of goods outside the taxpayer’s state of residence when sales tax is not collected on the transaction. Use taxes are generally designed to discourage the purchase of goods that are not subject to sales tax.

In Michigan, use tax functions as a counterpart to the state's sales tax and applies to the purchase of tangible goods for use, storage, or consumption within Michigan when sales tax has not been paid. This typically occurs when residents buy goods from out-of-state sellers, such as through online or catalog purchases. The Michigan use tax rate is the same as the sales tax rate, which is 6%. The purpose of the use tax is to ensure that in-state businesses are not at a competitive disadvantage with out-of-state sellers who do not charge sales tax. It also ensures that Michigan can collect tax revenue on goods that residents use in the state, regardless of where they were purchased. Taxpayers are responsible for reporting and paying use tax on their state income tax returns or through other designated reporting methods if sales tax was not collected at the time of purchase.

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Taxes

use tax

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Michigan State Code

Taxes

use tax

Michigan State Code

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