Michigan assesses a sales tax for the bulk of consumer transactions. However, to promote business in the state, there is a Michigan tax exemption on purchases for resale and certain other business transactions. Those seeking a Michigan sales tax exemption should first register to do business and collect sales taxes. They can then utilize Michigan tax exempt forms to get a resale or similar exemption on Michigan sales taxes.
Complete any required state-level business entity registrations. In Michigan, certain businesses must file formation documents with the Michigan Department of Energy, Labor and Economic Growth. These include corporations, limited partnerships, limited liability partnerships and limited liability companies. The reason you need to do this step first is because your business name will be used to register for taxes and subsequently obtain a Michigan tax exemption for sales tax.
Do your federal tax registration with the Internal Revenue Service. Certain businesses must get a federal employer identification number. These include, among others, nonprofit corporations and corporations or other businesses that have employees. Certain other businesses may also need an EIN. Go to the IRS.gov website to get the details on applying for a federal EIN. You can search for the information at the top of the main page.
Register for your Maryland sales taxes and other state taxes. Normally, you will be a registered seller to qualify for Maryland tax exemptions on your purchases. Go to the Michigan Department of Treasury “Online Business Registration” page at Michigan.gov/taxes/0,1607,7-238-43519_43521-155361–,00.html. Use the online form to register for Michigan sales tax and most other business taxes. You will receive a Michigan sales tax license and ID number in about a week.
This is usually the step in the process where you should consider consulting with a Michigan business attorney. You now need to know what kinds of purchases you make will qualify for a Michigan sales tax exemption. What follows is some information on geting an exemption but does not replace the services of a competent attorney.
Michigan does provide a very basic page that explains the various sales tax exemptions and how to qualify for such Michigan tax exemptions. You can read this information on the “Common Sales and Use Tax Exemptions and Requirements” page at Michigan.gov/taxes/0,1607,7-238-43529-155524–,00.html.
Read through the information to see which exemptions apply to you. If you need a Michigan resale certificate or other form to claim your sales tax exemptions, you can find that information on the page above.
From this point, the general rule is to provide your sales tax exemption certificate to the seller. Keep a steady supply of these so you can use one each time you make a Michigan tax exempt purchase.
Michigan Department of Treasury Sales Tax Exemptions