Short-term stays in Michigan carry a 6% state use tax, and in many counties and cities a local accommodations excise tax stacks on top of it. The Michigan lodging tax is not a standalone statute; it lives inside the state’s Use Tax Act and applies to any commercial overnight rental of 30 days or less. If you run a hotel, motel, bed and breakfast, cabin, or vacation rental, you are the one who collects the tax from guests, files returns on the schedule Treasury assigns you, and sends the money in.
What Counts as Taxable Lodging
MCL 205.93a taxes rooms and lodging furnished by hotelkeepers, motel operators, and anyone else offering accommodations to the public on a commercial basis, so long as the rental period does not exceed one continuous month.1Michigan Legislature. MCL – Section 205.93a The definitions of “hotel” and “motel” are drawn broadly and reach inns, tourist homes, rooming houses, resort cabins, apartment hotels, and for-profit camps. If guests pay you to stay overnight, assume the tax applies.
The tax base is the total charge for the accommodation. That includes mandatory fees bundled into the room rate, such as resort fees, required parking charges, or mandatory internet surcharges. Optional add-ons that a guest can decline and that are billed separately, like room service or a spa treatment, sit outside the taxable room charge.
State and Local Rates
The state rate is 6% of the total accommodation charge.1Michigan Legislature. MCL – Section 205.93a It is rarely the only tax on the bill.
Under Act 263 of 1974, a qualifying county may levy up to 5% of the accommodation charge without voter approval, or up to 8% with majority voter approval. Cities may also impose an excise tax of up to 3%.2Michigan Legislature. Act 263 of 1974 – Excise Tax on Business of Providing Accommodations These sit on top of the 6% state use tax. Kent County, for example, imposes an 8% hotel/motel excise tax.3Kent County, MI. Hotel / Motel Tax Confirm the local rate for the exact address of your property before you set your guest-facing tax line; a combined rate above 10% is common in some jurisdictions.
The 30-Day Rule
Stays that exceed one continuous month are not subject to the use tax. “One month” means 30 days or the calendar month of the rental period, whichever is shorter.4Legal Information Institute. Michigan Admin Code R 205.88 – Lodging Provided by Hotels, Motels, Cabins and Camps In practice, that means you charge tax on the front end of a stay that starts short and keep charging until it crosses the 30-day mark, at which point the tax stops.
Watch the paperwork on extended stays. If a guest checks out and immediately checks back in, Treasury may treat that as two short stays rather than one continuous one. Document the original check-in, any extensions, and the fact that occupancy was unbroken.
Who Is Exempt
Michigan Administrative Code R. 205.88 exempts a narrow set of guests:4Legal Information Institute. Michigan Admin Code R 205.88 – Lodging Provided by Hotels, Motels, Cabins and Camps
- Rooms furnished directly to the United States government, its unincorporated agencies, or wholly-owned government corporations, paid for directly with government funds.
- Rooms furnished directly to the State of Michigan or its political subdivisions, departments, or institutions, again paid for directly with government funds.
- Rooms furnished directly to qualifying nonprofits under the Use Tax Act.
The operative word is “directly.” A government employee who pays with a personal card and gets reimbursed later does not qualify; the room has to be billed to and paid by the government entity. Require an exemption certificate or government purchase order at check-in, and keep it. Not every 501(c)(3) automatically qualifies for the nonprofit exemption either. The organization has to establish exempt status under Michigan law, so ask for their Michigan exemption certificate before you waive tax.
Registering With the Department of Treasury
Before you collect any tax, you need a Michigan tax account. New providers register on Form 518, Registration for Michigan Taxes, and check the Use Tax box. Treasury asks that you mail the form at least six weeks before you open, and no more than three months ahead.5State of Michigan. Michigan Business Taxes Registration Book – Form 518 Mail it to the Michigan Department of Treasury, PO Box 30778, Lansing, MI 48909.
If you only rent at one or two events a year, skip Form 518. File a Concessionaire’s Sales Tax Return (Form 5089) for each event instead.5State of Michigan. Michigan Business Taxes Registration Book – Form 518
Filing Returns
Lodging providers report use tax on Form 5080, the Sales, Use and Withholding Taxes Monthly/Quarterly Return. Line 1a of that form covers accommodations alongside gross sales and rentals.6State of Michigan. Form 5080 – Sales, Use and Withholding Taxes Monthly/Quarterly Return Treasury assigns your frequency, monthly or quarterly, based on your estimated liability at registration. Monthly returns are due by the 20th of the following month. An annual reconciliation return covering the full calendar year is due by February 28 of the following year.7State of Michigan. Filing Frequency
File on exactly the schedule you were assigned. Filing monthly when Treasury has you on quarterly throws your account out of balance and generates notices you then have to unwind with amended returns.7State of Michigan. Filing Frequency
On monthly and quarterly returns, you only report gross sales and total tax due. Itemized deductions and exemptions belong on the annual reconciliation, so track your exemption certificates and deduction records throughout the year. Keep supporting records for at least four years, which lines up with Michigan’s general assessment window.
Booking Platforms and Who Actually Remits
If you list on a booking site, find out whether the platform is collecting tax for you before you assume anything. Under MCL 205.95c, a marketplace facilitator with nexus in Michigan must collect and remit use tax on the taxable sales it facilitates, including short-term lodging.8Michigan Legislature. MCL – Section 205.95c The statute treats the facilitator as the taxpayer for those transactions.
Platforms handle this differently in practice. Airbnb collects and remits the 6% state use tax on Michigan bookings. Vrbo leaves collection and remittance to the host. If your platform is not collecting the tax, you still owe it; using a booking website does not shift the obligation on its own. Check each platform’s Michigan policy and file for any bookings the platform did not cover.
When a facilitator does collect and remit, Treasury will generally audit the facilitator for those sales, not the individual host. If the host gave the platform bad information, though, the facilitator can push liability back to the host.8Michigan Legislature. MCL – Section 205.95c
Penalties for Late or Missing Payments
The civil penalty structure escalates fast. Late filing or payment triggers a 5% penalty on the tax due for the first two months, then another 5% for each additional month unpaid, up to a maximum of 25%.9Michigan Legislature. MCL – Section 205.24 Interest runs on top of that, at one percentage point above the adjusted prime rate per annum, compounded monthly, with the rate recalculated twice a year.10Michigan Legislature. MCL – Section 205.23
The criminal exposure is separate and serious:
- Intentionally defrauding or evading a tax is a felony. Fine up to $5,000, imprisonment up to five years, or both.11Michigan Legislature. MCL – Section 205.27
- Knowingly violating any other provision of the Revenue Act or a statute it administers is a misdemeanor. Fine up to $1,000, imprisonment up to one year, or both.11Michigan Legislature. MCL – Section 205.27
- Knowingly filing a false or fraudulent return with intent to defraud the state is treated as perjury under Michigan’s perjury laws.11Michigan Legislature. MCL – Section 205.27
An honest error that you correct promptly stays in the civil lane. Pocketing tax you collected from guests, or systematically underreporting revenue, is what the felony statute is written for.
Federal Income Tax on the Same Income
The Michigan use tax is what your guests pay. Your own income from the rental is a separate federal question. If you rent without providing significant services, the income and expenses go on Schedule E as passive rental income. If you provide substantial services for guest convenience, such as daily housekeeping, meals, or concierge service, the IRS treats it as an active business, so you file Schedule C and owe self-employment tax on the net profit.12Internal Revenue Service. Topic No. 414 – Rental Income and Expenses Hotels and bed-and-breakfasts typically land on Schedule C; a vacation home rented without services usually belongs on Schedule E.
One useful boundary: if you use a home as your personal residence and rent it out for fewer than 15 days in the year, you do not report the rental income at all. You also cannot deduct rental expenses for those days, but ordinary homeowner deductions like mortgage interest and property taxes remain available on Schedule A.13Internal Revenue Service. Publication 527 – Residential Rental Property
Changes on the Horizon
The framework is moving. A 2024 amendment to Act 263 updated how counties and local units collect the accommodations excise tax, aligning local procedures with the Use Tax Act and expanding marketplace facilitator obligations at the local level.2Michigan Legislature. Act 263 of 1974 – Excise Tax on Business of Providing Accommodations House Bill 5140, introduced in 2025, would push further, potentially requiring platforms to collect local excise taxes the same way they collect the state use tax.14Michigan Legislature. House Bill No. 5140 Separate proposals have floated a statewide short-term rental registration through LARA and a 6% short-term rental excise tax on properties rented more than 14 days per year. None of those broader proposals had been enacted as of early 2026. If you operate short-term rentals in Michigan, expect the compliance perimeter to keep widening.