Starting a Business in Michigan: 2026 Tax Registration Checklist

If you're starting a business in Michigan, completing your tax registration correctly is one of the most important early steps you can take. It's also one of the most commonly mishandled.

Michigan layers federal, state, and city-level tax obligations on top of each other, and the systems that govern them are not integrated. In our work with new Michigan businesses, the most common issues we see are missed city tax registrations, incorrect MTO setup, and confusion around first-year filing obligations. These mistakes stem from how fragmented Michigan's tax system is, not from carelessness, and getting them right from the start avoids penalties, delays, and costly clean-up later.

This checklist walks through the key Michigan business tax registration steps for 2026. It is intended as a general guide and not a substitute for advice from a qualified tax professional, since requirements vary depending on your business structure, location, and type of activity.

Before You Register: What You Need in Place

Two things need to happen before you can register a business for taxes in Michigan.

First, your legal entity must already be formed through Michigan's Department of Licensing and Regulatory Affairs (LARA). Entity formation and tax registration are separate processes. Second, you will need a Federal Employer Identification Number (EIN) from the IRS, which is required to complete the eRegistration application. You can apply through the IRS website at no cost, and approval is typically immediate.

One issue we occasionally see is that businesses use an informal address or incomplete ownership information in their LARA filing, which creates mismatches later when connecting accounts in MTO. Confirming these details upfront avoids that problem.

Step 1: Register on Michigan Treasury Online (MTO)

Michigan Treasury Online (MTO) is the Michigan Department of Treasury's central portal for registering and managing most business taxes. It is free, available around the clock, and the right starting point for your Michigan business tax registration.

Complete the eRegistration process through MTO rather than mailing Form 518. Online registration can typically be verified within 10 to 15 minutes of submission, while mailed applications take approximately four to six weeks. During eRegistration, you will select which taxes apply to your business, including sales and use tax, withholding tax, and others. We regularly help businesses correct mis-registrations with Treasury, an issue that can delay filings and create compliance risk, so if you are unsure which tax types apply, get guidance before you register.

Note that a Treasury Registration (TR) Number is mailed via USPS after registration and can take four to six weeks to arrive even for online applicants, so factor that into your planning.

For step-by-step guidance, visit the Michigan Department of Treasury's New Business Registration page.

Step 2: Obtain Your Sales Tax License

Michigan imposes a flat 6% sales tax on most retail sales of tangible personal property. If your business sells taxable goods to end customers, you are required to obtain a Michigan Sales Tax License before your first taxable sale. The license is free through MTO and renews automatically each year provided you file and pay on time. A few things worth knowing:

Who needs a license: Registration is required for retail sales of taxable goods. Certain services are generally not subject to Michigan sales tax, but whether a transaction is taxable often depends on how it is structured and whether tangible property is involved. Businesses that sell a mix of goods and services should not assume the service component is automatically exempt.

No local sales taxes: Unlike many other states, Michigan has no city or county sales taxes on top of the 6% state rate. This simplifies compliance for businesses operating across multiple Michigan locations.

Economic nexus: Remote sellers may have sales tax obligations in Michigan if they exceed $100,000 in annual gross sales to Michigan customers or complete 200 or more separate transactions in the state in a calendar year.

Filing frequency: Monthly filers must submit returns by the 20th of the following month. Quarterly or annual filing may apply to lower-volume businesses, and your assigned frequency will be confirmed when you register.

Key Takeaway: A Sales Tax License is required before your first taxable sale, not after. Businesses selling a mix of goods and services should verify which transactions are taxable rather than assuming exemption.

Step 3: City Income Tax Registration

This is the step that most commonly catches new Michigan business owners off guard. State-level registration through MTO does not cover city income tax obligations, and because there is no centralized system connecting them, businesses often miss city registrations entirely.

Currently, 24 Michigan cities impose a city income tax, including Detroit, Grand Rapids, Lansing, Flint, Saginaw, and Battle Creek. If your business operates in, or employs people who work in, any of these cities, you have registration and withholding obligations that must be handled separately from MTO. City income taxes apply to wages and business income earned within city limits for both residents and nonresidents, and this applies whether employees are on-site or working hybrid schedules that regularly bring them into the city.

Current rates for key cities (as of 2026):

• Detroit: 2.4% for residents; 1.2% for nonresidents
• Grand Rapids: 1.5% for residents; 0.75% for nonresidents
• Most other taxing cities: 1% for residents; 0.5% for nonresidents

Detroit's city income tax is administered by the Michigan Department of Treasury. Most other cities administer their own, with separate forms, filing schedules, and registration processes. City income tax returns are generally due April 30, not April 15.

For a detailed breakdown of Detroit's requirements, see: Detroit City Income Tax: What Businesses Need to Know.

Step 4: Understand Your First-Year Filing Requirements

Many businesses do not appreciate how many distinct filing obligations they have taken on until they reach year-end. A few key points by entity type:

C Corporations are subject to Michigan's Corporate Income Tax (CIT) at a flat 6% on Michigan-apportioned net income. Annual returns are due April 30 for calendar-year filers. Businesses expecting more than $800 in annual CIT liability must make quarterly estimated payments due April 15, July 15, October 15, and January 15. Businesses with less than $350,000 in Michigan-apportioned gross receipts or CIT liability of $100 or less are generally not required to file, though this threshold is annualized for short tax years. See the Michigan Department of Treasury's CIT Filing Requirements page for full details.

Pass-through entities (S corporations, partnerships, LLCs) are generally not subject to the Michigan CIT, but may benefit from electing into Michigan's Flow-Through Entity (FTE) Tax, which allows eligible businesses to pay state income tax at the entity level and work around the federal $10,000 SALT deduction cap. This election has an annual deadline, and many businesses miss it simply because they are not aware of it in time. See: Michigan's Flow-Through Entity Tax: 2026 Election Rules and Deadlines.

All registered businesses must file an annual Sales, Use and Withholding (SUW) return through MTO by February 28 of the following year. LLCs must also file an annual statement with LARA by February 15, with a $25 filing fee for profit entities. Missing the LARA deadline can affect your good standing with the state.

Michigan's decoupling from federal rules: In October 2025, Michigan enacted legislation decoupling from several federal tax provisions, including 100% bonus depreciation and immediate R&D expensing. If you expense assets or R&D costs in full on your federal return, Michigan may require different treatment, resulting in higher state taxable income than expected. For more detail, see: Michigan Corporate Income Tax: A 2026 Guide for Business Owners.

Start Strong with the Right Support

The steps here represent the foundation of tax compliance for a new Michigan business. None are especially complicated in isolation, but together they require careful sequencing and attention to deadlines that do not always align. The businesses that run into trouble are not usually those that ignore their obligations. They are the ones that assume things are covered when they are not.

At Revonary, we work with new and expanding businesses across Michigan to get these foundational steps right from day one. If you're setting up a new practice, launching a service business, or expanding into Michigan from another state, we can help you register correctly, avoid missed city tax obligations, and build a tax strategy that supports long-term growth.

Get in touch with our team to talk through your Michigan tax registration and what needs to be in place.

This article is intended for general informational purposes only and does not constitute tax, legal, or accounting advice. Tax laws and requirements change frequently. Please consult a qualified tax professional regarding your specific situation.