Michigan sales tax nexus is the connection between your business and the state that forces you to collect the 6% sales tax. You have it if you keep people or property in Michigan, if your sales into the state crossed $100,000 or 200 separate transactions in the prior calendar year, or if you pay Michigan referrers who send you enough business to meet the state’s click-through test. Michigan charges a single statewide rate with no local add-ons, so once you know nexus applies, the mechanics are the same everywhere in the state.
When Physical Presence Creates Nexus
Any tangible tie to Michigan is enough. Employees, sales representatives, subcontractors, or agents working on your behalf inside the state count, even for a short stay. So does property: an office, a storefront, a warehouse, vehicles, or inventory sitting in a third-party fulfillment center.1Michigan Department of Treasury. Michigan Department of Treasury – Nexus
Fulfillment inventory is the common surprise for e-commerce sellers. If you use Amazon FBA and your products get routed to a Michigan warehouse, you have physical presence in the state regardless of whether you chose that location. Company trucks making regular deliveries and technicians traveling in for installations or repairs do the same thing.
There is no dollar threshold on physical presence. A single employee soliciting sales for a single day is enough, and collection starts from the first dollar of taxable sales. You cannot wait until you hit the economic nexus limits below.2Michigan Department of Treasury. Revenue Administrative Bulletin 2018-16
The Economic Nexus Thresholds for Remote Sellers
After the Supreme Court’s 2018 decision in South Dakota v. Wayfair, Michigan adopted rules that reach sellers with no physical footprint. You have nexus if, during the previous calendar year, you had either:
- more than $100,000 in gross sales into Michigan, or
- 200 or more separate transactions with Michigan customers.
Either one is enough. Both thresholds remain in effect for 2026.3Michigan Department of Treasury. Remote Seller FAQ
Pay attention to the word “gross.” That means all sales, not just taxable ones. Exempt and non-taxable transactions count toward the $100,000 figure and the 200-transaction count. A seller with a mix of taxable goods and exempt items cannot strip out the exempt portion when measuring the line.2Michigan Department of Treasury. Revenue Administrative Bulletin 2018-16
Once you cross either threshold, you owe tax on all taxable sales going forward. Monitor your Michigan totals regularly rather than checking once at year-end, because the obligation begins as soon as the line is crossed.
When Economic Nexus Ends
Economic nexus is not permanent. If an entire calendar year passes during which you stay below both the $100,000 and the 200-transaction marks, your duty to collect ends. You still have to file any returns covering the period when nexus did apply, but you can stop collecting on future sales until the thresholds are crossed again.3Michigan Department of Treasury. Remote Seller FAQ
Click-Through and Affiliate Relationships
Michigan also reaches sellers who use in-state referral relationships. Under the click-through rule, you are presumed to be doing business in Michigan if you pay a Michigan-based person or company to refer customers to you (through a website link, in-person pitch, or any other method) and both of these are true over the prior 12 months:
- referred sales to Michigan purchasers exceeded $10,000 in cumulative gross receipts, and
- your total cumulative gross receipts from all Michigan sales exceeded $50,000.
Both conditions have to be met. A seller with $15,000 in referred Michigan sales but only $30,000 in total Michigan sales does not trigger click-through nexus.4Michigan Legislature. Michigan Code 205.52b – Retail Sale of Tangible Personal Property to Purchaser; Presumptions
Affiliate nexus works on a similar logic. When a related company in Michigan, such as a sister entity sharing a trademark or a local agent handling returns and warranty service, helps maintain your market presence, Michigan treats that as your presence. The rules are drawn broadly to keep businesses from splitting operations across separate legal entities to avoid collection.
When a Marketplace Handles It for You
If you sell through a platform like Amazon, Etsy, or Walmart Marketplace, the facilitator is generally responsible for collecting and remitting Michigan tax on your behalf. Marketplace facilitators face the same $100,000 or 200-transaction thresholds, and once they cross, the collection duty on all third-party sales they process shifts to them.
For a small seller whose Michigan sales flow entirely through a marketplace facilitator, and who has no physical presence in the state, that means no Michigan sales tax license and no returns. If you also sell direct through your own website, or you have physical nexus, you still have to register and file. On that return, leave the marketplace-facilitated sales off (the facilitator already reported them) and include only your direct sales.3Michigan Department of Treasury. Remote Seller FAQ
Registering and Collecting Once Nexus Applies
Registration goes through the Michigan Treasury Online (MTO) portal. You create a personal user profile, then link your business using your federal Employer Identification Number, which doubles as your Michigan business account number. The online application opens in a separate browser window from MTO.5Michigan Department of Treasury. New Business Registration
The system usually recognizes a new application within 15 minutes, though full processing can take up to 48 hours. To check status, log back into MTO and try to connect your user profile to the business account. If it lets you proceed, you’re processed. If you get an error directing you to complete registration, give it more time.5Michigan Department of Treasury. New Business Registration
Once you start collecting, some customers will claim their purchases are tax-exempt, typically other businesses buying for resale. Michigan handles these through Form 3372, the Sales and Use Tax Certificate of Exemption, and also accepts the Multistate Tax Commission’s Uniform Certificate and the Streamlined Sales Tax Agreement Certificate. The state does not issue “tax exempt numbers,” and you cannot accept a number in place of a properly completed form. All four sections of Form 3372 have to be filled out; paper copies need the buyer’s signature, electronic versions do not. Keep the certificates on file as your proof if the transaction is audited later.6Michigan Department of Treasury. Exemptions FAQ7Michigan Department of Treasury. Michigan Sales and Use Tax Certificate of Exemption
Filing Deadlines
Michigan assigns you a filing frequency (monthly, quarterly, or annual) based on your expected tax liability. The Department of Treasury makes that determination each year, so your frequency can change as sales volume grows or shrinks. Whatever frequency you’re assigned, everyone also files an annual return by February 28 covering the prior calendar year.8Michigan Department of Treasury. Sales and Use Taxes
- Monthly filers: the 20th of the following month.
- Quarterly filers: April 20, July 20, October 20, and January 20.
- Annual filers: February 28 of the following year.
When a due date falls on a weekend or state holiday, the deadline shifts to the next business day. Returns and payments go through MTO.8Michigan Department of Treasury. Sales and Use Taxes
The Cost of Ignoring Nexus
If you fail to file a return or pay what you owe, Michigan adds a penalty of 5% of the unpaid tax for the first month or fraction of a month, plus another 5% for each additional month the delinquency continues, up to a ceiling of 25%. Interest accrues on top at a monthly rate set one percentage point above the adjusted prime rate, which the Treasury recalculates twice a year from commercial bank data.9Michigan Legislature. Michigan Code 205.23 – Tax Deficiency; Interest
The penalty clock runs from the original due date, not from the day Michigan discovers you should have been collecting. A seller who had nexus for two years without registering can owe back tax for the whole period plus accumulated penalty and interest. Voluntary disclosure, where you reach out to the Department of Treasury before they contact you, sometimes brings penalty relief. Interest generally cannot be waived.