Does Michigan Tax Groceries?

by Tom Streissguth
Michigan spares food shoppers from its 6 percent sales tax rate.

Michigan spares food shoppers from its 6 percent sales tax rate.

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If you're a Michigander, you're familiar with the state sales tax -- a flat 6 percent rate on almost everything you buy at retail. This includes household sundries that you typically find at a grocery store, but the state allows an exemption for food and prescription drugs. Some organizations are exempt from sales tax, and the IRS offers a deduction you can take for the payment of sales tax.

Grocery Sales Taxes

Michigan requires any business entity that sells tangible property to charge sales tax at the rate of 6 percent of the purchase price, and remit collected taxes to the state. The state exempts food, prescription drugs, and magazines. There is no exemption for household items such as cleaners, flatware or cooking equipment that you might find at the store. The state reserves the right to tax food prepared for immediate consumption, such as food purchased from a vending machine or a deli. Michigan sets a lower rate of 4 percent sales tax on home heating fuels.

Taxing Authority

Retailers remit collected sales tax to the Michigan Department of Treasury. The state does not allow local authorities, such as a city or county, to levy additional sales taxes. Anyone required to collect sales tax needs a sales tax license, which retailers apply for with Form 518, Registration for Michigan Taxes.

Exemptions

Michigan imposes sales tax only on the final user. This means other buyers may claim an exemption; for example, a wholesaler purchasing an item for eventual resale ned not pay sales tax. Items intended for agricultural use or for use in industrial processing are also exempt. A non-profit group such as a church, school or hospital may also claim an exemption, as may any organization with 501(c)(3) or 501(c)(4) non-profit, tax-exempt status with the IRS. To claim an exemption, you must present an exemption certificate at the point of purchase. Michigan does not issue tax-exempt numbers.

Federal Tax Deduction

The IRS allows Michiganders, and all other US taxpayers, to deduct either state sales taxes or state income taxes, as long as the taxpayer itemizes deductions on Schedule A of Form 1040. If you choose to deduct sales taxes, you must keep your receipts, or use a sales tax calculator that the IRS offers online. If you are filing a married, separate return, both spouses must choose the same method of deducting expenses: a standard deduction on Form 1040 or itemized deductions calculated on Schedule A.

About the Author

Tom Streissguth has authored more than 100 books for the school and library market, including works for the Gale, Enslow, Facts on File and Lerner Publications. He is the founder of The Archive, an independent publisher of historical journalism collections, and holds a Bachelor of Arts from Yale University.

Photo Credits

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