General Information

• Sales tax in Michigan was raised from four percent to six percent in 1994. This tax must also be paid on goods purchased out of state and brought into the state by residents. It is called a "use tax" in that context and Michigan residents are expected to pay it along with their income taxes. Only individuals or businesses that sell physical goods to customers are required to charge sales tax.
  
  

Wholesaler Exemptions

• Wholesalers selling to other wholesalers or to retailers are not required to charge sales tax. Only merchants making retail sales are required to charge sales tax. Since wholesalers do not sell to final consumers, they don't charge sales tax.
  
  

Contractor Exemptions

• Consumers are not charged sales tax on goods used for construction.Hard working construction worker at a construction scene. image by Andy Dean from Fotolia.com
  
  Contractors and subcontractors are also not required to charge sales tax. Anyone performing construction, renovations, repairs or other improvements on real estate must pay sales tax on the goods they purchase to make those improvements. However, no sales tax is charged on construction materials for a nonprofit hospital or housing entity.
  
  

Exemptions on Specific Goods

• Prescription drugs are exempt from Michigan sales tax.prescription image by robert lerich from Fotolia.com
  
  Some types of goods are exempt from sales tax. These items include newspapers and periodicals, movies, hearing aids and contact lenses prescribed by a medical professional, prescription drugs for human use, non-alcoholic beverages in sealed containers and uncooked food.
  
  

Other Exemptions

• Several other factors may exempt purchased goods from Michigan sales tax. Products bought for the purpose of agricultural produce are exempt, as are products and equipment bought for use in industrial laundering. Any food product bought with a food stamp is exempt. Beverage containers and certain products bought through vending machines are also exempt.