If you’re launching a business in Michigan or planning to sell taxable goods or services, knowing how to get a sales tax license in Michigan is crucial for legal and financial compliance. The sales tax license, often referred to as the Sales Tax Permit or Sales Tax Number, allows your business to collect and remit sales tax to the state.
Whether you’re running a retail shop, an e-commerce site, or a service-based company, any business entity dealing with taxable transactions must register for this license with the Michigan Department of Treasury. Without it, you’re not legally authorized to collect sales tax—and failing to register can result in fines, back taxes, and business disruptions.
The process is fairly straightforward, but understanding the required forms, eligibility criteria, registration platform (Michigan Treasury Online), and ongoing responsibilities can be overwhelming, especially for first-time entrepreneurs. That’s why we’ve created this complete, step-by-step guide to walk you through how to get a sales tax license in Michigan—from pre-registration to compliance best practices.
In this article, we’ll answer important questions like when to apply, what documents are needed, how long it takes, and what ongoing tax reporting obligations you’ll have. We’ll also cover specific scenarios like remote sellers, marketplaces, and business changes.
Why You Need a Sales Tax License in Michigan
If you plan to operate a business in Michigan that sells taxable goods, certain digital products, or services, it’s essential to understand how to get sales tax license in Michigan and why it’s legally required. This license—issued by the Michigan Department of Treasury—gives your business the authority to collect and remit sales tax on qualifying transactions. Without it, you are not legally allowed to collect tax, and failing to do so when required could lead to significant fines, audits, or even business suspension.
Michigan imposes a 6% sales tax on most retail transactions, including both in-person and online sales. Whether you’re running a brick-and-mortar store, selling on platforms like Etsy or Shopify, or shipping from out of state, you may need to register depending on your total sales volume and business structure.
A sales tax license does more than ensure compliance—it enhances your business’s credibility. Suppliers and wholesale partners often ask for proof of registration, and customers expect transparent tax handling. The good news is that the license is free, but the responsibility that comes with it is serious. Inaccurate information or missed filings can quickly lead to penalties. That’s why understanding the registration process and your ongoing obligations is crucial for any Michigan-based business.
How to Get a Sales Tax License in Michigan: Step-by-Step Process
Start by Creating an MTO Account
The first step in the process of obtaining a sales tax license in Michigan is setting up a Michigan Treasury Online (MTO) account. This is the official platform used by the state to manage all business tax registrations and filings. Visit the MTO website and create an account by entering your legal business name, email address, and other required credentials. Once registered, you’ll be able to access the necessary forms and manage your tax responsibilities online.
Prepare All Required Business Information
Before beginning the application, make sure you have all essential business details readily available. This includes your Federal Employer Identification Number (FEIN), or Social Security Number if you’re a sole proprietor, as well as your NAICS code, physical business address, and ownership information. Being prepared will help you avoid delays during the registration process.
Select the Appropriate Registration Type
After logging into your MTO account, choose the option to register a new business. When prompted, select “Sales Tax License” as the type of license you wish to apply for. This option will direct you to the correct application form.
Submit the Application
You’ll be asked to provide information such as your estimated monthly sales, your business start date, and whether you have employees. Carefully complete the form and verify the accuracy of all entries before submitting it through the portal.
Receive Your License and Account Number
In most cases, applications are processed immediately or within 7 to 10 business days. Once approved, you’ll receive your official sales tax license and account number, which should be kept for your records and displayed if required.
Documents & Info You’ll Need to Get a Sales Tax License in Michigan
Before you begin the application process for how to get a sales tax license in Michigan, it’s important to gather all the necessary documentation and information. Having everything ready will ensure a smoother and faster registration through the Michigan Treasury Online (MTO) system. Below is a checklist of what you’ll need:
- Federal Employer Identification Number (FEIN): All corporations, partnerships, and LLCs must have an FEIN issued by the IRS. Sole proprietors without employees may use their Social Security Number (SSN) instead.
- NAICS Code: This is a six-digit number that classifies your business based on its primary economic activity. For example, a retail store, restaurant, or online shop each has its own code.
- Business Entity Type: You’ll need to specify whether your business is a sole proprietorship, partnership, limited liability company (LLC), or corporation. This helps the state categorize your tax obligations accurately.
- Legal Business Name and DBA (Doing Business As): Be prepared to enter your registered legal business name and any trade names you plan to use. This ensures consistency across tax and legal filings.
- Business Address and Contact Information: Include your physical business location, mailing address, contact phone number, and an active email address for official communication.
- Sales Start Date: The date you plan to begin taxable sales determines when your tax filings are due, so be accurate.
Having these documents ready ahead of time will save you time and help prevent errors during your registration.
How to Get Sales Tax License in Michigan for Different Business Models
- Brick-and-Mortar Retailers: If you operate a physical store in Michigan, you must apply for a sales tax license before opening your doors to customers. You’re required to collect sales tax at the point of sale on taxable items, and failure to register in advance can lead to compliance issues and fines.
- Online and eCommerce Sellers: Online sellers must register for a sales tax license if they exceed Michigan’s economic nexus threshold. This includes $100,000 in annual sales or more than 200 separate transactions delivered to Michigan. Even if you’re located out of state, meeting either threshold triggers a tax obligation.
- Marketplace Sellers (Amazon, Etsy, etc.): Platforms like Amazon and Etsy may handle tax collection, but that doesn’t automatically exempt you. If you make sales outside of those marketplaces or operate under a business name, you may still need to register for your own sales tax license.
- Service Providers: Some services, such as software, landscaping, and telecommunications, are subject to Michigan sales tax. If you offer these services, you must obtain a license to collect and remit the tax properly.
- Remote or Out-of-State Sellers: Businesses without a physical presence in Michigan must register if they ship taxable products into the state and meet economic nexus standards. This applies even if you operate solely online.
What to Do After You Receive Your Sales Tax License?
Once you’ve successfully registered and received your sales tax license in Michigan, your responsibilities don’t end there. Staying compliant with Michigan’s sales tax laws is an ongoing obligation that requires consistent attention. One of the most important tasks is filing your sales tax returns on time. Depending on your business’s sales volume, you may be required to file monthly, quarterly, or annually. Even if no tax is due, you are still expected to file a return—failure to do so can result in penalties or even suspension of your license.
In addition to filing, you must maintain detailed and accurate records of all taxable and non-taxable sales. These records help in preparing accurate tax filings and are vital in the event of an audit. You are also required to remit the sales tax you collect to the Michigan Department of Treasury by the appropriate due dates.
Lastly, it’s essential to report any changes to your business, such as ownership, address, or legal name, through the Michigan Treasury Online (MTO) system and cancel or update your license if your business structure changes or closes.
In Summary
Learning how to get a sales tax license in Michigan is more than just a legal formality—it’s a smart move toward building a compliant and credible business. Whether you’re a solo entrepreneur, opening a storefront, or launching an e-commerce brand, registering for a sales tax license ensures you meet Michigan’s tax regulations from day one. The process, handled through the Michigan Treasury Online portal, is accessible and streamlined if you have the right information ready. Beyond compliance, staying up to date with filing deadlines and tax payments helps you avoid unnecessary penalties. More importantly, it positions your business for growth, trustworthiness, and long-term success within Michigan’s regulated marketplace. Don’t skip this vital step.
FAQ’s
Q. Is a sales tax license the same as a business license in Michigan?
A. No, they serve different purposes. A sales tax license lets you legally collect sales tax, while a business license grants general authorization to operate. Many businesses require both.
Q. How much does a sales tax license cost in Michigan?
A. There is no fee to apply. Michigan offers the sales tax license for free through the Michigan Treasury Online (MTO) portal, making compliance accessible to all business types.
Q. Do I need a sales tax license if I only sell online in Michigan?
A. Yes. Under Michigan’s economic nexus law, you are legally required to register if your online sales exceed $100,000 or 200 transactions annually.
Q. Can I use one license for multiple locations in Michigan?
A. Yes, a single application covers multiple locations. However, you must list each location during registration to receive proper sub-account numbers for tax tracking.
Q. What happens if I don’t get a sales tax license but collect tax?
A. Collecting sales tax without a license is illegal. This can lead to audits, penalties, repayment of back taxes, and potential criminal charges for tax fraud or evasion.
