Michigan Form 1353 is the Michigan Department of Treasury’s Nexus Questionnaire, sent to businesses the state believes may owe Michigan taxes but have not registered or filed. If it arrived with a Letter of Inquiry, the Discovery and Tax Enforcement Division has flagged your company for possible sales tax, use tax, corporate income tax, withholding tax, or some combination. Complete the questionnaire honestly and return it by the deadline printed on the letter.
Why the Discovery Division Sent It
The Discovery and Tax Enforcement Division issues Form 1353 when it identifies a business that appears to be conducting taxable activity in Michigan without being registered. Leads can come from data-sharing with other states, third-party transaction records, marketplace platform reports, or information about employees or property in the state. The Letter of Inquiry includes a reference number you’ll enter on the form.
Receiving the questionnaire does not automatically mean you owe tax. It means Michigan wants enough information to decide. Your answers help the Department determine whether your business has nexus, meaning a connection to Michigan strong enough to require you to collect, report, or remit one or more state taxes. Honest answers can just as easily confirm you have no Michigan obligation.
Nexus Thresholds to Know Before You Start
The form is organized around specific nexus triggers. Knowing the thresholds before you check boxes saves time and helps you pull the right records.
Physical Presence
A business has physical presence nexus if employees, agents, independent contractors, or other affiliated persons conduct business activity in Michigan on its behalf for more than one day during a tax year.1Michigan Department of Treasury. Nexus and Apportionment Owning, renting, leasing, or maintaining tangible personal property, real property, or an office in the state also counts.2Michigan Department of Treasury. Michigan Form 1353 – Nexus Questionnaire Trade-show booths and seasonal warehouses can trigger this threshold.
Economic Presence for Sales and Use Tax
A remote seller has Michigan sales and use tax nexus if, in the previous calendar year, it made more than $100,000 in gross sales to Michigan customers or completed 200 or more separate transactions with Michigan customers.3Michigan Department of Treasury. Remote Seller FAQ Both taxable and non-taxable sales count toward these thresholds.
Economic Presence for Corporate Income Tax
CIT nexus uses a different test. A company has CIT nexus if it actively solicits sales in Michigan and has gross receipts of $350,000 or more per year sourced to Michigan. “Actively solicits” is defined broadly to include speech, conduct, or activity purposefully directed at Michigan residents that invites or is ancillary to a purchase order, including internet advertising and email campaigns.1Michigan Department of Treasury. Nexus and Apportionment
Affiliate and Flow-Through Entity Nexus
Affiliate nexus arises when your company has an agreement with Michigan residents who refer potential buyers to you for a commission, and your cumulative gross receipts from those referrals exceed $10,000 from referred purchasers or $50,000 total from Michigan purchasers in a 12-month period.2Michigan Department of Treasury. Michigan Form 1353 – Nexus Questionnaire Flow-through entity nexus applies if your company holds a direct or indirect ownership interest in a pass-through entity (S corporation, partnership, LLC taxed as a partnership, or trust) that itself has Michigan nexus.1Michigan Department of Treasury. Nexus and Apportionment
Filling Out the Form, Page by Page
The questionnaire runs three pages. Most sections ask you to check a box and list the calendar years, within the last four completed tax years, in which the described activity occurred. Before you sit down with it, pull together your sales records, payroll data, property records, and any contracts with Michigan-based agents or affiliates.
Page One: Business Information and Nexus Indicators
Enter your legal business name, FEIN or Social Security number, any DBA name, and your full street address. Put the reference number from your Letter of Inquiry in Section 1.2Michigan Department of Treasury. Michigan Form 1353 – Nexus Questionnaire
Section 2 asks for a short factual description of your business activity. Something like “online retail sales of pet supplies” or “software licensing and support services” is the level of detail they want. Section 3 asks how you sell in Michigan specifically. If every Michigan sale happens through your website with no salespeople in the state, say so.
Sections 4 through 9 are the core nexus indicators. One instruction on the form matters a lot: if none of these boxes apply, you can sign and mail it back without completing the rest.2Michigan Department of Treasury. Michigan Form 1353 – Nexus Questionnaire What each section covers:
- Section 4 asks about people in Michigan. Check it if employees, agents, contractors, or brokers conducted any business activity in the state on your behalf, and indicate whether each year involved one day or two or more days.
- Section 5 asks about property. Check it if you owned, rented, leased, or used tangible property, real estate, or office space in Michigan, and list the time periods.
- Section 6 covers affiliate referrals, with sub-questions about whether referred-buyer receipts exceeded $10,000 or total Michigan receipts exceeded $50,000 in a 12-month period.
- Section 7 covers economic presence for sales and use tax. Check it if your Michigan sales exceeded $100,000 or you completed 200 or more separate transactions in a calendar year.
- Section 8a asks about active solicitation through mail, phone, email, advertising, or an e-commerce website directed at Michigan residents.
- Section 8b asks whether your company or unitary business group had $350,000 or more in gross receipts sourced to Michigan per year.
- Section 9 asks about flow-through entity ownership where that entity has Michigan nexus.
Page Two: Activity Type and PL 86-272
Section 10 asks what kind of activity you conduct in Michigan. Check all that apply: sale of real property, tangible personal property, or intangible property; rental property; performance of services; financial institution; or insurance company. There is also a checkbox for “Protected Activities (PL 86-272)” if you believe the federal interstate commerce protection applies.
Sections 11 and 12 ask about specific activities to sort protected from unprotected ones under PL 86-272. For each activity, indicate the tax years and add any comments. Section 13 targets a common gray area: whether your employees, while physically in Michigan, approve or accept purchase orders, perform credit checks, or authorize credit. Those go beyond mere solicitation.
Section 14 asks which Michigan taxes you currently file, if any. Options include sales tax, use tax on sales or rentals, use tax on purchases, payroll withholding, corporate income tax, and individual or composite individual income tax. Check “None” if you have never registered.2Michigan Department of Treasury. Michigan Form 1353 – Nexus Questionnaire
Page Three: Financial Data and Signature
The last page collects summary financial figures and requires an authorized signature. Check for consistency: if you checked Section 7 indicating sales over $100,000, the revenue figures on page three should reflect that. Sign, date, and give a contact phone number and email so the Discovery Division can reach you with follow-up questions instead of escalating the inquiry.
PL 86-272 and Why It Matters on the Form
Public Law 86-272 prohibits a state from imposing a net income tax on a business whose only in-state activity is soliciting orders for tangible personal property, provided those orders are sent out of state for approval and filled by shipment from outside the state.4Multistate Tax Commission. Statement on PL 86-272 The protection applies only to income tax. It does not shield you from sales and use tax if you meet Michigan’s economic nexus thresholds.
The line between protected solicitation and unprotected activity is thinner than most businesses assume. Sending sales representatives to hand out catalogs and take orders qualifies. Having those same representatives install products, provide training, handle complaints in person, or accept returns in Michigan does not. If employees do anything beyond asking for orders during their time in the state, PL 86-272 likely will not help on the income tax side. Sections 11 through 13 are built to pin that down.
PL 86-272 also does not apply to sales of services or intangible property. A software company licensing products to Michigan customers cannot claim the protection even if every interaction happens remotely, because software licenses are intangible.
Where and When to Send It
Return Form 1353 by the due date printed on your Letter of Inquiry.5Michigan Department of Treasury. Nexus The form lists two addresses:2Michigan Department of Treasury. Michigan Form 1353 – Nexus Questionnaire
- U.S. Mail (including certified and registered): Michigan Department of Treasury, Discovery and Tax Enforcement Division, PO Box 30140, Lansing, MI 48909.
- Courier delivery: Michigan Department of Treasury, Discovery and Tax Enforcement Division, 7285 Parsons Drive, Dimondale, MI 48821.
If you are mailing close to the deadline, use certified mail or a courier so you have proof of timely delivery. The form itself warns that completing it is “required in order to avoid additional inquiries.”5Michigan Department of Treasury. Nexus
What Happens After You Submit
The Discovery Division reviews your responses and decides which Michigan taxes, if any, your business must register for. If the Division concludes you have nexus, you will need to register and begin filing. For sales tax, register through Michigan Treasury Online (MTO) or, if you sell in multiple states, through the Streamlined Sales Tax registration system.3Michigan Department of Treasury. Remote Seller FAQ Michigan then issues a sales tax license with instructions for filing and paying online.
If your answers show no nexus, the inquiry should close without further action.
The Voluntary Disclosure Window
If you realize you should have been collecting Michigan tax for prior years, a voluntary disclosure agreement can limit your back-tax exposure. An initial Letter of Inquiry does not disqualify you. Michigan’s statute specifically provides that a letter of inquiry requesting information is not considered “previous contact” that would bar eligibility.6Michigan Legislature. MCL 205-30c A final letter of inquiry, notice of intent to assess, or audit notification does disqualify you. Ignoring the questionnaire and letting the Division escalate can close that window.
If You Don’t Respond
Ignoring Form 1353 does not make the obligation disappear. The Discovery Division will follow up and can eventually issue an assessment based on whatever information it has. If Michigan determines you should have been registered and filing, penalties accrue from the date the obligation first arose, not from the date you were caught. Late-filing penalties start at 5 percent of the tax owed for the first two months and increase by 5 percent per month after that, up to a maximum of 25 percent. Interest also accrues daily on unpaid tax at a rate set by the Department, which was 8.48 percent annually for the first half of 2026.
Responding promptly, even to say you believe you have no nexus, puts your position on record and preserves your eligibility for a voluntary disclosure agreement if you later discover past-year obligations you need to clean up.