Michigan — Sales & Use Tax

Michigan imposes a 6% sales tax on persons engaged in the business of making sales at retail of tangible personal property. The tax is levied as an annual privilege tax on gross proceeds of retail sales, less deductions allowed by the General Sales Tax Act.

Source: Mich. Comp. Laws § 205.52(1)

The complementary use tax applies at the same 6% rate to the storage, use, or consumption of tangible personal property in Michigan when Michigan sales tax has not been paid. Use tax applies to purchases from out-of-state sellers, remote sellers, and purchases made online or through catalogs when the seller does not collect Michigan sales tax.

Source: Mich. Comp. Laws § 205.93

Source: Michigan Department of Treasury, Use Tax

Michigan's constitution prohibits local governments from levying their own sales taxes. The 6% rate is uniform statewide—Detroit, Grand Rapids, Ann Arbor, and all other municipalities charge exactly 6%.

## Reduced rate for residential utilities

Sales of electricity, natural gas, and home heating fuels for residential consumption are taxed at 4%, not the standard 6% rate.

Source: Mich. Comp. Laws § 205.52(2)(a)

## What is taxable

The sales tax applies to retail sales of tangible personal property—physical goods transferred for consideration. This includes most physical products sold to end users.

Source: Mich. Comp. Laws § 205.52(1)

The tax also applies to limited categories of services, including intrastate telecommunications services and hotel/lodging accommodations.

Source: Mich. Comp. Laws § 205.93a

Services are generally exempt from Michigan sales and use tax. Michigan does not impose a broad-based service tax—only specific enumerated services are subject to tax.

## Who must collect

Any person engaged in the business of making sales at retail in Michigan must obtain a sales tax license and collect the tax. A Michigan sales tax license is required before engaging in or continuing a taxable business, regardless of sales volume.

Marketplace facilitators making or facilitating retail sales to Michigan purchasers must collect and remit tax on all sales they facilitate, regardless of whether the underlying marketplace seller has nexus with Michigan. This rule applies regardless of whether the marketplace facilitator has physical presence in Michigan.

Source: Mich. Comp. Laws § 205.52d

Remote sellers and out-of-state sellers with sufficient connection to Michigan must register and collect use tax. A seller is presumed to be engaged in business in Michigan if the seller maintains a physical presence in the state or meets other statutory criteria, including affiliate-nexus thresholds.

Source: Mich. Comp. Laws § 205.52b

Review status: Not yet human confirmed as of 2026-07-19. All statute and Treasury links have been updated to their current official URLs as of this date. The reference to Michigan Admin. Code R. 205.1 has been omitted, as no valid primary-source URL could be found as of this check.

A remote seller has nexus with Michigan if, in the previous calendar year, it made over $100,000 in gross sales or 200 or more separate transactions with Michigan customers. Meeting either threshold requires the seller to register and begin collecting sales or use tax on January 1 of the year following the year the threshold was exceeded. Gross sales include all sales to Michigan customers—taxable, nontaxable, and exempt transactions.

Source: Michigan Department of Treasury, Remote Seller FAQ

Michigan law requires retailers to obtain a sales tax license before engaging in or continuing retail sales, regardless of sales volume. The Michigan Department of Treasury administers registration via the Michigan Treasury Online (MTO) e-Registration system or by mailing Form 518, Registration for Michigan Taxes.

Registration methods and timeline:

• Online applications (MTO): authenticated within 10–15 minutes, with Department processing typically completed within 48 hours.
• Paper Form 518: processing time is 4–6 weeks, depending on volume.
• Once approved, the license is available for immediate download through MTO, while paper applicants receive a mailed license.

Legal requirement and documentation:

• Licensure is mandatory prior to commencing retail business in Michigan (see Mich. Comp. Laws § 205.53).
• Michigan Admin. Code R. 205.1 states that each sales tax license expires on September 30 of each year and must be renewed annually. (Note: Department consumer-facing web guidance in some locations states January–December validity; the regulatory rule controls.)
• The Department FAQ confirms online and paper processing practices but is not controlling for license duration.

Source: Mich. Comp. Laws § 205.53 Source: Mich. Admin. Code R. 205.1 Source: Michigan Department of Treasury, Sales Tax License FAQ

The regulatory citation and download link to Mich. Admin. Code R. 205.1 have been updated following a broken link, and detail the license expiration period as September 30, not year-end. This reflects the current rule as of July 2026. If a taxpayer is told otherwise by Department web pages, the regulation is authoritative. No other material changes were found in statute/regulation or Department process as of this review.

Property purchased for resale is exempt from Michigan use tax. Retailers purchasing for resale at retail and wholesalers purchasing for resale may claim this exemption. To support a resale exemption claim, sellers must maintain records including the purchaser's name, address, date of sale, article purchased, exemption type, amount of sale, and the purchaser's sales tax license or use tax registration number if claiming the resale exemption. Records must be retained for at least four years from the date tax was due.

Source: Mich. Comp. Laws § 205.94(1)(i)

Source: Revenue Administrative Bulletin 2021-18

Weekend and holiday rule

If a required due date for filing a return or making a payment falls on a Saturday, Sunday, state holiday, or legal banking holiday, the return and payment are instead due on the next succeeding business day. This rule is codified in statute and applies to all Michigan sales and use tax filings. For example, if the standard due date (e.g., the 20th of the month) falls on a Sunday, the tax return and payment would be due on Monday (or the next business day not a holiday). This weekend and holiday accommodation prevents taxpayers from incurring late penalties when state offices are closed. The Michigan Department of Treasury confirms this interpretation in its official filing instructions.

Source: Mich. Comp. Laws § 205.56(6)

Source: Michigan Department of Treasury, Sales & Use Tax

Review status: Not yet human confirmed as of 2026-06-15.

Michigan requires marketplace facilitators to collect and remit sales and use tax on all taxable sales made by the facilitator or facilitated for marketplace sellers to Michigan purchasers, regardless of whether the underlying marketplace seller has nexus with Michigan. This obligation applies regardless of whether the marketplace facilitator has physical presence in the state. A marketplace facilitator is treated as a person engaged in the business of making sales at retail and has all the rights and duties of a taxpayer under Michigan's sales and use tax acts.

Source: Mich. Comp. Laws § 205.52d(1)–(2)

Source: Mich. Comp. Laws § 205.95c(1)–(2)

## Definition of marketplace facilitator

A marketplace facilitator is a person who facilitates a retail sale by a marketplace seller by (1) listing or advertising for sale by a marketplace seller in a marketplace tangible personal property or taxable services, and (2) either directly or indirectly through agreements or arrangements with third parties or affiliates collecting payment from the customer and transmitting that payment to the marketplace seller for consideration.

The statute excludes certain persons from the definition. A person is not a marketplace facilitator with respect to:

• Sales of or charges for rooms, lodgings, or accommodations if provided by a registered hotelkeeper, motel operator, or other person providing accommodations under their own brand, or
• Sales of telecommunications services.

Additionally, pure advertising platforms that do not collect and transmit payment are excluded—a person who operates a platform providing only advertising services (listing property for sale) without collecting payment from the customer is not a marketplace facilitator.

Source: Mich. Comp. Laws § 205.95c(11)(b)

## Effective date

Michigan's marketplace facilitator collection requirement took effect January 1, 2020, enacted by 2019 Public Acts 143 (sales tax) and 144 (use tax). The economic nexus policy that preceded codification was adopted by the Department of Treasury on August 1, 2018, effective October 1, 2018.

Source: Mich. Comp. Laws § 205.52d, History

Source: Revenue Administrative Bulletin 2021-22

## Tax base and reporting

The tax base for marketplace-facilitated sales is the sales price or purchase price charged by the facilitator to the customer, without regard to fees or commissions paid by the marketplace seller—whether paid directly or withheld by the facilitator. Marketplace facilitators must report both their direct sales and the sales they facilitate to Michigan purchasers in the manner prescribed by the Department of Treasury.

Source: Revenue Administrative Bulletin 2021-22

## Exemption documentation

Because the marketplace facilitator is generally the taxpayer for facilitated sales and is the party subject to audit, marketplace facilitators must obtain and maintain records of all claims of exemption consistent with Mich. Comp. Laws §§ 205.62 and 205.104b, unless the exemption is product-based (such as exempt food). Marketplace sellers must provide all exemption claims received directly from their customers to their marketplace facilitators.

Source: Revenue Administrative Bulletin 2021-22

## Audit and liability allocation

When a marketplace facilitator is required to remit tax under the statute, the Department of Treasury audits only the marketplace facilitator for sales made by marketplace sellers that were facilitated by the facilitator. The Department may not audit a marketplace seller for facilitated sales unless the marketplace seller fails to provide the facilitator with sufficient information to the extent the facilitator is not liable under the relief provisions.

A marketplace facilitator is relieved of liability for failure to remit the correct amount of tax to the extent it demonstrates that the failure was due to incorrect or insufficient information given by the marketplace seller. This relief does not apply if the marketplace seller is an affiliate of the marketplace facilitator. A marketplace facilitator is also relieved of liability if it demonstrates that the tax was already paid by the marketplace seller or if the facilitator provides a valid exemption claim from the marketplace seller's purchaser.

Conversely, a marketplace seller is not liable for tax on sales made through a marketplace facilitator required to remit tax, unless the seller fails to provide sufficient information to the facilitator to the extent the facilitator is not liable.

Source: Mich. Comp. Laws § 205.52d(6)–(9)

Source: Mich. Comp. Laws § 205.95c(6)–(9)

## Class action prohibition

Michigan law prohibits class actions against a marketplace facilitator in any Michigan court on behalf of purchasers arising from or related to an overpayment of sales tax remitted on facilitated sales, regardless of whether the claim is characterized as a tax refund claim. This prohibition does not affect an individual purchaser's right to seek a refund.

Source: Mich. Comp. Laws § 205.52d(4)

Michigan law provides several prominent product-based sales and use tax exemptions beyond resale: food and food ingredients (excluding prepared food), prescription drugs, industrial processing equipment, and tangible property used in agricultural production—each with distinct statutory or constitutional authority.

Food and food ingredients: Food and food ingredients are generally exempt under Michigan Constitution Article IX, § 8, implemented in statute at MCL 205.54g(1) and MCL 205.94d(1). Effective January 29, 2026, the scope and definitions for this exemption, including the definition of “prepared food,” are governed by Revenue Administrative Bulletin (RAB) 2026-2, which expressly supersedes prior bulletins (including RAB 2022-4 and earlier guidance). RAB 2026-2 clarifies what qualifies as exempt food and makes several interpretive updates:

• Prepared food is subject to tax. RAB 2026-2 provides detailed definitions and new examples (e.g., hot foods, sandwiches, meals, and food sold by weight or with eating utensils provided by the seller) and addresses current marketplace practices and packaging methods. Sellers must use these updated criteria to determine taxability of food items sold for immediate consumption vs. ingredients or items for home consumption.
• The exemption does not apply to all items marketed as food—prepared food intended for immediate consumption, and foods sold hot or with utensils, are taxable under the statute as clarified by RAB 2026-2.

Prescription drugs: Prescription drugs are exempt by constitutional mandate (Art IX, § 8), and further codified in the General Sales Tax Act and Use Tax Act (MCL 205.54g(1)(a); MCL 205.94d(1)(a)). RAB 2024-21 confirms that the exemption applies to drugs dispensed pursuant to a prescription, including certain over-the-counter medicines if dispensed under a prescription, but generally excludes vitamins and dietary supplements unless prescribed.

Industrial processing exemption: Industrial processing property used in manufacturing or processing tangible personal property is exempt as defined in MCL 205.54t (sales) and MCL 205.94o (use). The exemption covers machinery, equipment, and supplies used in industrial processing but excludes property used for non-production administrative purposes or non-integral maintenance. Department guidance, including RAB 2024-7, further details application boundaries across various production steps, from raw material handling through finished goods inventory.

Agricultural production exemption: Tangible personal property used in commercial farming or livestock operations is exempt under MCL 205.54a(1)(e)-(f) and MCL 205.94(1)(f). This includes seeds, fertilizers, livestock feed, and farm equipment, provided the property is used in a qualifying commercial farming context. Treasury’s Exemptions FAQ and supporting guidance (as in RAB 2023-9) interpret the scope of these exemptions; note the FAQ provides informal summary, not binding regulation.

Recent update notification (2026): The interpretive framework for the food exemption is now governed by RAB 2026-2, issued January 29, 2026, which expressly replaces RAB 2022-4 and prior bulletins. Sellers should review RAB 2026-2 for the currently controlling definitions and examples applicable to retail food sales.

Source: Michigan Constitution Art IX, § 8; MCL 205.54g; MCL 205.54t; MCL 205.94d; MCL 205.94o; MCL 205.54a; MCL 205.94; RAB 2026-2; RAB 2023-9; RAB 2024-7; RAB 2024-21

In Michigan, the taxability of software transactions depends on whether the transaction constitutes a taxable transfer of "prewritten computer software" (deemed tangible personal property) or a nontaxable service or digital good.

Prewritten computer software is defined in Michigan law as software that is not custom-designed for a particular purchaser and is delivered by any means. Such software is treated as tangible personal property and is taxable regardless of whether it is delivered on physical media, by download, or by other electronic means. This rule is confirmed in Revenue Administrative Bulletin (RAB) 2023-10 and is reflected in Michigan’s General Sales Tax Act (MCL 205.52(1), MCL 205.51a(r)) and Use Tax Act (MCL 205.93(1), MCL 205.92(k)).

By contrast, software as a service (SaaS)—where software is accessed remotely via the cloud, with no transfer of any code to the user—is treated as a nontaxable service. This is based on the Michigan Court of Appeals’ decision in Auto-Owners Insurance Co v Dep’t of Treasury (2015), where the court held that remote access to software, with no software delivered to the end user, did not result in a taxable transfer of tangible personal property. RAB 2023-10 and related Treasury guidance confirm that SaaS arrangements, where the customer merely accesses software hosted on the provider’s servers without taking delivery, are not subject to Michigan sales or use tax.

When a transaction involves both a service and the delivery of computer code (e.g., a local desktop agent or hybrid cloud arrangement), the Department applies the "incidental to service" test from Catalina Marketing Sales Corp v Dep’t of Treasury: if the predominant purpose of the transaction is the service, and any software transfer is incidental, the whole transaction may be treated as nontaxable; if the transfer of software predominates, it is taxable.

Finally, digital goods (such as e-books, music downloads, streaming content, and digital artwork) are not explicitly enumerated as taxable property or services in Michigan law. RAB 2023-10 states that digital products not classified as prewritten computer software are not subject to sales or use tax, regardless of whether they are delivered electronically or by other means.

Summary Table:

• SaaS (no delivered code): nontaxable service
• Downloaded/delivered prewritten software: taxable tangible property
• Hybrid/service-plus-software arrangement: apply Catalina test
• Other digital goods (e-books, streamed content): not taxable

Caution / review status: Not yet human confirmed.

Source: MCL 205.51a(r); MCL 205.52(1); MCL 205.92(k); MCL 205.93(1) Source: Revenue Administrative Bulletin 2023-10 Source: Auto-Owners Insurance Co v Dep’t of Treasury, 313 Mich App 56 (2015)_RPTR_150o-321505-FINAL.PDF) Source: Catalina Mktg Sales Corp v Dep’t of Treasury, 470 Mich 13 (2004)

Michigan sellers must obtain and retain a valid exemption certificate when purchasers claim an exemption from sales or use tax, including most non-resale exemptions. The Department presumes all sales are taxable unless the seller secures proper documentation.

Acceptable Certificate Formats (RAB 2024-11): Michigan recognizes several valid formats for exemption documentation:

• Michigan Sales and Use Tax Certificate of Exemption (Form 3372),
• Purchase orders, contracts, or other contemporaneous documents with all required data elements,
• Multistate Tax Commission (MTC) Uniform Sales and Use Tax Certificate (for multi-state sellers),
• Streamlined Sales and Use Tax Agreement Certificate,
• A signed purchaser letter containing all data elements specified by law.

Certificate Content and Good Faith Acceptance: A valid exemption certificate must:

• Identify both purchaser and seller,
• Describe the property or service,
• State the claimed exemption and type of transaction (single, blanket, recurring),
• Include purchaser’s signature and date.

Sellers must exercise good faith (as defined in RAB 2024-11 and MCL 205.62) when accepting and verifying certificates and may rely on digital/electronic forms so long as all statutorily required information is provided.

Retention Period: Sellers must retain the exemption certificate or required data (paper or electronic) for at least four years from the date tax was due. This general rule is unchanged under MCL 205.68 and MCL 205.104a. The rule covers any accepted documentation format.

Expanded Rule for Micro Brewers (2024): Effective July 18, 2024, RAB 2024-11 authorizes micro brewers to document exemption claims by retaining the purchaser’s Michigan liquor license number in lieu of a completed form, so long as the purchase is for resale as beer or wine. This updates and enlarges the range of acceptable documentation methods specifically for micro brewers.

Blanket Certificates: Blanket certificates may be used for ongoing sales and are generally valid for up to four years, unless the purchaser specifies an earlier date. Certificates in recurring business relationships remain valid if at least one exempt transaction occurs per year.

Update Notice (2024): RAB 2024-11, approved July 18, 2024, supersedes prior exemption bulletins and revises (expands) documentation and good faith standards, notably for micro brewers. Practitioners should ensure compliance with all RAB 2024-11 requirements for their specific industry and exemption type.

Source: RAB 2024-11, MCL 205.62, MCL 205.68, MCL 205.104a, Michigan Form 3372 instructions

Caution / review status: Not yet human confirmed. Section updated for RAB 2024-11 as of 2026-07-19.

Remote sellers that exceed Michigan’s economic nexus threshold ($100,000 in Michigan sales or 200 separate Michigan transactions in the preceding calendar year) are required to register for, collect, and remit Michigan sales or use tax beginning on January 1 of the calendar year following the year in which the threshold was exceeded.

No immediate trigger on threshold crossing: Michigan does not use a rolling or immediate lookback for remote seller economic nexus. Instead, the obligation is prospective, based on prior-year sales or transactions. For example, if a remote seller surpasses $100,000 in Michigan sales during October of 2025, the seller does not need to begin collection immediately upon crossing the threshold. Instead, the seller’s obligation to register and collect commences January 1, 2026.

Sales unexpectedly exceed the threshold: If a remote seller’s Michigan sales unexpectedly surpass the threshold later in the year, or after a period of noncollection, there is still no requirement to begin collecting prior to the subsequent January 1. Economic nexus is always determined on a calendar-year lookback basis; a seller who crosses the threshold mid-year is responsible for collection beginning at the start of the next calendar year.

Citation and guidance: This rule is stated in the Michigan Department of Treasury’s official Remote Seller FAQ and is confirmed by Revenue Administrative Bulletin 2021-21, which formalizes the same calendar-year lookback trigger date and the January 1 effective date for collecting obligations.

Source: Michigan Department of Treasury, Remote Seller FAQ Source: Revenue Administrative Bulletin 2021-21

Michigan law allows a deduction from taxable sales for "bad debts" that have become uncollectible and were previously reported as taxable sales. The statutory framework and associated administrative guidance provide practitioners with the requirements, timeline, documentation, and special rules for claiming such deductions under both sales and use tax acts.

Eligibility and Timing Under Mich. Comp. Laws § 205.54g (General Sales Tax Act), a retailer may deduct the portion of a sale that is determined to be uncollectible and actually written off as a bad debt on the retailer’s books and records for federal income tax purposes. The deduction may only be claimed on the return filed for the period in which the bad debt is written off, not retroactively applied to prior returns. This aligns with Mich. Admin. Code R. 205.6, which states the deduction must be taken on the return covering the period in which the debt is written off.

Required Documentation The retailer must retain documentation substantiating:

• The sale was previously reported and tax paid.
• The amount is actually uncollectible and has been written off as a bad debt for federal income tax purposes.
• The specific account and amount for which the deduction is claimed.
• Any payments or recoveries received post-charge off must be reported as taxable in the period received.

Acceptable documentation includes account statements, federal income tax records showing the write-off, and detailed reports demonstrating the deduction amount. Michigan Revenue Administrative Bulletin (RAB) 2020-16 gives detailed examples of documentation and procedural requirements.

Special Rules and Exclusions

• Assigned or Sold Debt: If the receivable is sold or assigned to a third party (such as a factoring company), the assignor/retailer may only deduct the portion remaining uncollected at the time of assignment; once assigned, subsequent bad debt deductions are not permitted by the retailer.
• Private Label Credit Arrangements: For "private label" credit card sales, the deduction may be taken by the person who owns the receivable and actually writes off the bad debt. RAB 2020-16 details attribution when finance companies, banks, or third-party assignees are involved.
• Exclusions: No deduction is permitted for debts on property delivered outside Michigan, interest/finance charges, repossessed property recoveries, or sales tax amounts not previously paid or remitted.

Supporting Authority

• Mich. Comp. Laws §§ 205.54g (sales tax) and 205.94d (use tax) – statutory right of deduction.
• Mich. Admin. Code R. 205.6 – procedural and timing requirements.
• Revenue Administrative Bulletin 2020-16 – detailed Department guidance including examples, application to third-party/credit assignee relationships, and documentation standards.

Source: Mich. Comp. Laws § 205.54g Source: Mich. Admin. Code R. 205.6 Source: Revenue Administrative Bulletin 2020-16

Michigan law provides a specific resale exemption and reporting framework for drop shipment sales involving out-of-state sellers, Michigan suppliers, and Michigan customers.

Legal structure of a drop shipment: A drop shipment, for Michigan sales and use tax, means a sale where an out-of-state retailer (not licensed for Michigan sales tax) sells tangible personal property to a Michigan customer and instructs a Michigan-based supplier to ship the property directly to the Michigan customer.

Supplier exemption upon certificate: The Michigan supplier's sale to the out-of-state retailer is exempt from Michigan sales tax if the out-of-state retailer provides a resale or exemption certificate or other documentation acceptable to the Michigan Department of Treasury showing the goods are being purchased for resale according to the law of the state in which the out-of-state retailer is based. The supplier must exercise good faith and reasonable care in accepting this certificate, consistent with Michigan law. If a valid certificate is not provided, the supplier is liable for the tax on that sale. MCL § 205.54k(2).

Annual reporting requirement: When the supplier claims the resale exemption for a drop shipment based on a certificate (especially an out-of-state certificate or alternative document), the supplier must file an annual report with the Michigan Department of Treasury. This report must include the name, address, and, if available, the federal taxpayer identification number of both the out-of-state retailer and the Michigan customer. This obligation is triggered when exemption is claimed as outlined by statute. MCL § 205.54k(3).

Obligation of the Michigan customer: If the supplier does not collect Michigan sales tax, the Michigan customer is generally required to self-assess and remit Michigan use tax unless another exemption applies. MCL § 205.94k. The use tax applies to storage, use, or consumption within Michigan of tangible personal property purchased for storage, use or consumption from a retailer, unless the transaction is otherwise subject to Michigan sales tax.

Acceptable documentation: The supplier must retain all supporting certificates and the annual drop shipment reports for at least four years. Michigan accepts Form 3372, the Multistate Tax Commission Uniform Sales and Use Tax Certificate, Streamlined Sales and Use Tax Agreement Certificate of Exemption, or other alternative documents that include all data elements required by Michigan statute. (See Tax Compliance Bureau Manual Ch. 18, 2018.)

If out-of-state retailer obtains Michigan nexus: If the out-of-state retailer becomes required to collect Michigan sales or use tax (by obtaining nexus), its obligation changes: it must register and collect Michigan tax directly from Michigan customers. The supplier’s application of the drop shipment resale exemption and the reporting framework only apply where the reseller is not licensed to collect Michigan tax. (MCL § 205.54k; Manual Ch. 18)

Source: MCL § 205.54k; MCL § 205.94k; MI Treasury, Tax Compliance Bureau Manual Ch. 18 – Drop Shipments (2018)

Caution / Review status: Not yet human confirmed. This section closely paraphrases statute and Michigan Department of Treasury guidance as of 2026-06-16. Future Department interpretations or updated manuals could affect operational requirements.

Michigan’s Department of Treasury generally has four years from the later of the return’s due date or the date it was actually filed to assess additional sales or use tax; taxpayers have the same four-year period to request refunds. However, exceptions apply: there is no limitations period if a required return is not filed, and if fraud, intent to evade tax, or failure to notify the Department of an IRS change is involved, Treasury may assess within two years after discovering the underreporting. Statutory audit extensions and special rules for audit findings and written consents are governed by MCL 205.27a(3).

Standard rule: MCL 205.27a(2) states, “A deficiency, interest, or penalty shall not be assessed after the expiration of 4 years after the date set for the filing of the required return or after the date the return was filed, whichever is later….” The same time limitation generally applies to refund claims (see MCL 205.27a(2), MCL 205.62(11)). If a taxpayer fails to file a return, there is no time bar on assessment.

Fraud, evasion, or federal change not notified: If a return is filed fraudulently or with the intent to evade tax, or if a taxpayer fails to notify Treasury of a federal taxable income change, the Department may assess a deficiency within “2 years after the discovery of the fraud, intent to evade, or failure to notify.” (MCL 205.27a(2)).

Audit extensions and tolling: Under MCL 205.27a(3), the limitations period may be extended when (a) a taxpayer is under audit and receives a Preliminary Audit Determination (PAD)—the Department has one year after the audit/pending period to issue a final assessment; (b) the taxpayer and Treasury execute a written agreement extending the period; (c) litigation or informal conference is pending; or (d) Treasury may assess within 90 days after a court order or conference result.

Supporting material: Revenue Administrative Bulletin (RAB) 2015-26 explains the detailed operation of the audit extension and the effect of Public Act 3 of 2014 on audit limitations.

Source: Mich. Comp. Laws § 205.27a Source: Mich. Comp. Laws § 205.62(11) Source: Revenue Administrative Bulletin 2015-26

Caution / review status: Not yet human confirmed. Primary statute cited, but practitioners should always confirm with latest statutory text for specific scenarios.