Michigan State Tax Guide

Michigan state tax rates and rules for income, sales, property, fuel, cigarette, and other taxes that impact residents.

Photo of the Michigan state flag blowing in the wind in front of a sunrise for a Michigan state tax article.
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Michigan State Tax: Overview

Michigan's median property tax rate is relatively high, and fuel taxes are high when compared to other states. 

Michigan currently has a flat state income tax of 4.05%, but municipalities tack on their own taxes. Sales taxes in Michigan are relatively low.

[Data for this state tax guide was gathered from a number of sources including the U.S. Census Bureau, the state’s government website, and the Sales Tax Handbook. Property taxes are cited as a rate percentage rather than the assessed value.] 

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Michigan Income Taxes

picture of skyline in Detroit Michigan

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For 2023, Michigan reduced its flat individual income tax rate for 2023 from 4.25% to 4.05%. 

The reduction is due to a state law that automatically reduces the income tax rate based on the relationship between revenue growth and inflation rates. (When the general fund's growth exceeds the inflation rate, income tax rates were scheduled to go down for 2023.) 

Next year, however, absent legislative changes, Michigan's flat individual income tax rate will return to 4.25%. 

  • Social Security benefits are not taxed by Michigan.
  • Military pensions and Railroad Retirement benefits are exempt for all taxpayers.

Michigan sales tax

Michigan's sales tax rate is 6%. There are no local taxes.

  • Groceries: Exempt, but prepared food is taxable
  • Clothing: Taxable
  • Motor Vehicles: Taxable
  • Prescription Drugs: Exempt

How much is property tax in Michigan?

little model house on a table

(Image credit: Getty Images)

In Michigan, the property tax rate paid as a percentage of assessed value is 1.38% according to the Tax Foundation.

Michigan gas taxes (motor fuel)

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Gasoline$0.19 per gallon
Disel$0.15 per gallon

Source: Sales Tax Handbook

Michigan taxes on alcohol and tobacco

Michigan Tobacco Taxes

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Cigarettes$2 per pack
Other Tobacco Products32% of wholesale price
Medical Marijuana6%
Recreational Marijuana16% (cannabis sales tax plus 10% state excise tax)

Michigan Alchohol Taxes

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Beer$0.20 per gallon
Wine$0.51 per gallon ($0.76 if above 16% alcohol by volume)
Liquor12% of retail price (4% general fund tax, 4% state school aid tax, and 4% convention facility development tax)

Source: Sales Tax Handbook

Michigan estate and inheritance taxes

Michigan has no estate or inheritance tax.

Kelley R. Taylor
Senior Tax Editor, Kiplinger.com

As the senior tax editor at Kiplinger.com, Kelley R. Taylor simplifies federal and state tax information, news, and developments to help empower readers. Kelley has over two decades of experience advising on and covering education, law, finance, and tax as a corporate attorney and business journalist. 

With contributions from