Tax Laws in Michigan.

Flat rate of 4.25% (2026). Michigan allows a personal exemption and conforms partially to the federal Internal Revenue Code.

6% sales tax on most tangible personal property. No local sales tax. Services are generally exempt.

6% on federal taxable income apportioned to Michigan, levied on C corporations. Pass-throughs (S-corps, LLCs, partnerships) generally owe only at the member level.

Annual increases in taxable value for homesteads are capped at the lesser of 5% or the rate of inflation (CPI). Taxable value "pops up" to State Equalized Value upon sale.

Permits cities to levy income tax at 1% on residents and 0.5% on nonresidents (Detroit is higher: 2.4%/1.2%). Roughly 24 Michigan cities impose local income tax.