Michigan: The Great Lakes State

Michigan is made up of two large peninsulas located in the north of the country. Between the two parts lies Lake Michigan. Due to its location on the Great Lakes, the “Great Lakes State” has the longest freshwater coastline of any US state. Of the 250,000 km² area, an exceptionally large proportion is covered by water, namely a good 40 percent. According to ehuacom, the largest city is Detroit and is home to a good 700,000 of Michigan’s almost ten million inhabitants.

Businesses thrive in the state’s globally connected location due to a business-friendly environment that ranks among the best in the nation. Michigan has a culture of innovation and a lifestyle unlike any other.

In fact, Michigan is in the top 3 states for FDI and Detroit is the number one metro area for FDI projects, according to Site Selection magazine. Investments by German companies account for the second largest share of foreign direct investments.

Michigan Location Map

GLOBALLY ACCESSIBLE LOCATION

Almost half of the American and Canadian population lives within a radius of 800 kilometers. Michigan thus offers very good access to the consumer market and to a large number of trading centers.

More than a quarter of the more than $700 billion in annual trade between the United States and Canada crosses the Ambassador Bridge. This makes it the busiest border crossing in North America.

The 33 active deep-water ports surrounding Michigan will be joined by 18 commercial airports. Among them is the Detroit Metropolitan, one of the largest air hubs in North America. Both importing to and exporting from Michigan is therefore easily possible globally.

MOBILITY AND AUTOMOTIVE ENGINEERING ARE OMNIPRESENT

The mobility and automotive industry has historically been closely related to Michigan. The global automotive industry has its past here, its current present and very likely its future as well.

Michigan is home to nearly 19 percent of all US automobile production, more than any other state in the nation. The “Great Lakes State” is also number 1 in automotive and mobility research, with 73% of total spending in the USA being made here. 18 of the world’s largest OEMs ( original equipment manufacturers ), 96 of the top 100 suppliers and a wealth of mobility tech companies have found their home here.

Michigan has the most extensive network of autonomous vehicle and mobility testing infrastructure, as well as the most friendly self-driving vehicle testing laws in the country. The highest concentration of engineers and designers in the country can be found here, as well as the highest concentration of automotive employment, manufacturers and suppliers.

ENORMOUS TALENT POOL

The MEDC (Michigan Economic Development Corporation) is committed to fostering the growth of a highly skilled workforce. In order to achieve this goal, we are working with agencies throughout Michigan. This is to prepare the workforce for the demands of the 21st century business climate.

Michigan’s pool of world-class talent is one of the top reasons companies choose to locate or expand in Michigan. Employers rate the local talent pool as one of the most talented, diverse and rich in the country. Unsurprisingly, the state has one of the largest talent pools of skilled workers ideal for vehicle manufacturing.

MICHIGAN INCOME TAX

Michigan charges an income tax of 4.25%. In addition, federal income taxes are payable.

CORPORATE INCOME TAX IN MICHIGAN

Michigan charges a 6% corporate income tax. In addition, federal corporation tax is payable.

MICHIGAN SALES TAX

There is no sales tax or Value Added Tax (VAT) in the USA based on the European model. Instead, in the United States, states, counties, and municipalities levy a local sales tax on the sale of products (but not services).

Sales tax rate in Michigan

The sales tax in Michigan is 6% at the state level. Municipalities or counties do not levy a sales tax.

Michigan Nexus Laws & Sales Tax

Learn more about the Economic Nexus Laws in the context of Sales Tax here.

Effective Date

After September 30, 2018

Transactions included:

Sale of tangible personal property or taxable services supplied to the US state

Treatment of tax-exempt transactions:

Exempt Sales and Exempt Services are included in the threshold

Reason:

sales or transactions

Sales/Transactions Threshold:

$100,000 or 200 transactions

Evaluation period:

The threshold applies to the previous calendar year

Extra information:

  • Registration Requirements: Michigan requires that a remote business register to collect and remit sales tax by the beginning of the calendar year after the threshold is exceeded.
  • Information for Remote Sellers
  • RAB 2018-16

Michigan Marketplace Sellers & Sales Tax

Learn more about Marketplace seller registration requirements

Effective date by the marketplace broker:

January 1, 2020

Economic Nexus Threshold:

More than $100,000 in taxable or non-taxable sales or at least 200 state transactions in the preceding calendar year. When calculating the threshold:

  • Remote sellers should include direct sales and sales through a marketplace
  • Marketplace moderators include all sales made through the marketplace

Registration requirements:

  • Remote Multichannel Sellers: You must register with the Michigan Department of Treasury (DOT) and collect your Michigan sales tax on sales that are not taxed by a marketplace intermediary once you have crossed the Economic Nexus Threshold.
  • Remote Marketplace Sellers: You don’t have to register and collect sales tax in Michigan even if you cross the Economic Nexus threshold.
  • In-State Multichannel Sellers: You must register with the Michigan DOT and collect taxes on sales that are not taxed by a marketplace intermediary.
  • Marketplace Vendors in the State: No need to register. Contact the Michigan DOT for more information.