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
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?
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)
| Product | Tax |
|---|---|
| Gasoline | $0.19 per gallon |
| Disel | $0.15 per gallon |
Source: Sales Tax Handbook
Michigan taxes on alcohol and tobacco
Michigan Tobacco Taxes
| Product | Tax |
|---|---|
| Cigarettes | $2 per pack |
| Other Tobacco Products | 32% of wholesale price |
| Medical Marijuana | 6% |
| Recreational Marijuana | 16% (cannabis sales tax plus 10% state excise tax) |
Michigan Alchohol Taxes
| Product | Tax |
|---|---|
| Beer | $0.20 per gallon |
| Wine | $0.51 per gallon ($0.76 if above 16% alcohol by volume) |
| Liquor | 12% 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.
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