How to Complete Michigan Form 163: Notice of Change or Discontinuance

Michigan Form 163, Notice of Change or Discontinuance, is the one-page notice you send to the Michigan Department of Treasury when you close a business, sell it, or change which state taxes you’re registered for. You can complete it online through Michigan Treasury Online at mto.treasury.michigan.gov or download the PDF and mail it to the Registration Section in Lansing.¹ One form covers Sales Tax, Use Tax, Withholding Tax, Corporate Income Tax, and Michigan Business Tax; IFTA, Motor Fuel, and Tobacco Tax accounts have to be closed separately.

When You Need to File It

The Treasury expects a Form 163 whenever your business status changes in a way that affects your registrations. That includes shutting down, selling, restructuring, or simply dropping one tax type while keeping others active.

Closing the business entirely. The “Close Entire Business” option discontinues all covered Michigan tax accounts as of the effective date you provide.¹
Selling the business. The form records the buyer’s name, FEIN if known, and address so the Treasury can transfer responsibility going forward.¹
Adding or dropping a specific tax type. A retailer that closes its storefront but keeps employees can delete Sales Tax and keep Withholding Tax active, all on the same form.
Changing ownership structure. Shifting from a sole proprietorship to an LLC, adding or removing a partner, or forming or dissolving a corporation counts as a change in ownership that requires a new registration.

If you’re selling or closing, don’t lose track of the deadline for your final returns: 15 days after the date of the sale or the date you quit the business.² The Treasury’s guidance on selling or closing a business specifically directs owners to notify the Registration Section by completing Form 163.³

What to Have Ready Before You Start

Mismatched or missing information is the fastest way to get the form kicked back. Gather these first:

Your account number. Either your Federal Employer Identification Number (FEIN) or your Michigan Treasury number; the form requires at least one.¹
Your exact legal business name, as it appears on file with the Treasury.
The effective date of the change or discontinuance. The Treasury uses this to set your final tax period.
Buyer information, if you’re selling: legal name, FEIN if known, and address.¹
A daytime phone number in case the Treasury needs to clarify anything.

If you’re changing your account number because the IRS issued a new FEIN, the form requires written verification from the IRS. Include that letter with your submission.¹

How to Fill It Out

Form 163 is a single page with several sections. You only complete the sections that apply to you.

Closing the Entire Business

Check the “Close Entire Business” box and enter the effective date. That discontinues all Michigan taxes tied to the business except IFTA, Motor Fuel, and Tobacco Tax.¹ If you hold any of those three registrations, contact the Treasury directly to close them.

Selling the Entire Business

Check the “Sell Entire Business” box and fill in the sale’s effective date along with the buyer’s name, FEIN if known, and address. Accurate buyer details protect you: once the new owner is on record, tax accruing after the sale date is no longer your problem.

Sellers should know that Michigan law makes buyers personally liable for the seller’s outstanding taxes, interest, and penalties if they fail to escrow enough to cover them.² You can sign a written waiver of confidentiality so the Treasury will release your known or estimated liability within 60 days, which lets both sides set up a proper escrow at closing.

Adding or Deleting a Specific Tax Type

If the business stays open but its tax obligations change, use the section that lists each tax type individually: Sales Tax, Use Tax, Payroll/Pension Withholding Tax, Corporate Income Tax, and Michigan Business Tax.¹ Mark which ones you’re adding or deleting and give an effective date for each.

How to Submit It

You have two options:

Online through Michigan Treasury Online at mto.treasury.michigan.gov. The portal is available around the clock and gives you an immediate confirmation to save.⁴
By mail to Michigan Department of Treasury, Registration Section, PO Box 30778, Lansing MI 48909. Sign the form before sending.¹

Online is faster and creates a paper trail automatically. If you mail it, certified mail gives you proof of the submission date. Expect several weeks for a mailed form to be processed.

What Still Has to Happen After You File

Filing Form 163 updates your registration. It doesn’t close your books.

File Your Final Michigan Returns

The form itself says a business owner discontinuing a business must timely file all final returns for the year.¹ Every active tax type needs a final return covering the period through your discontinuance date, and the deadline is 15 days after you sold or quit the business.²

Request a Tax Clearance Certificate If You’re Dissolving With LARA

If you’re formally dissolving or withdrawing your entity through the Michigan Department of Licensing and Regulatory Affairs, Form 163 is one part of the package. The Treasury’s FAQ confirms that Form 163 is required when requesting a Tax Clearance Certificate for Dissolution or Withdrawal, and both can be submitted through Michigan Treasury Online.⁵ Filing articles of dissolution with LARA without clearing your Treasury accounts can leave tax liability sitting against officers or members personally.

Federal Closure Is Separate

Form 163 only handles Michigan registrations. Closing at the federal level has its own steps through the IRS, including a final federal income tax return, final employment tax returns, and a letter closing your EIN account.⁶ Don’t assume the Michigan filing takes care of anything on the IRS side.

What Happens If You Don’t File

Skipping Form 163 doesn’t make your accounts disappear. The Treasury will assume the business is still operating and can issue estimated assessments based on prior returns, other available information, or both.² Those estimates can grow into collection actions, liens, and penalties against a business that no longer exists.

The penalty for failing to file a required return starts at $10 or 5 percent of the tax due, whichever is greater, for the first month, with another 5 percent added each month the return stays unfiled, up to a maximum of 50 percent of the tax owed.⁷ Penalties for informational returns run $10 per day per failure, capped at $400.⁸ Officers, members, managers, or partners can be held personally liable for unpaid taxes if the department determines they were the responsible person.² Filing the form on time is the cleanest way to close that exposure.

1
Michigan Department of Treasury. Michigan Form 163 Notice of Change or Discontinuance
2
Michigan Legislature. Michigan Compiled Laws 205.27a
3
Michigan Department of Treasury. Selling or Closing Your Business
4
Michigan Department of Treasury. Michigan Treasury Online
5
Michigan Department of Treasury. Tax Clearance Frequently Asked Questions
6
Internal Revenue Service. Closing a Business
7
Legal Information Institute. Michigan Administrative Code R 205.1013 – Failure to File or Pay Penalty; Waiver of Penalty; Reasonable Cause for Failure to File or Pay
8
Michigan Legislature. Michigan Compiled Laws 205.24 – Failure or Refusal to File Return or Pay Tax