Michigan Sales Tax Nexus: $100,000 or 200 Transactions — Remote Seller Rules After Wayfair

Michigan's $100,000 or 200-Transaction Threshold

Under Michigan's General Sales Tax Act (MCL 205.52b) and Use Tax Act (MCL 205.95a), a remote seller establishes economic nexus in Michigan when their gross sales into the state exceed $100,000 or their total number of separate transactions delivered to Michigan buyers reaches 200 or more during the preceding calendar year. The threshold is disjunctive — crossing either prong independently creates a collection obligation.

“Gross sales” for threshold purposes means total revenue from sales delivered to Michigan addresses, before deductions for returns, allowances, or exemptions. Michigan does not exclude exempt sales from the threshold calculation — even if a transaction would not ultimately be taxable (e.g., a sale for resale), it still counts toward the $100,000 or 200-transaction measurement. This is consistent with the approach taken by the majority of states that adopted the Wayfair-era standard.

The Michigan Department of Treasury formalized these rules in Revenue Administrative Bulletin 2018-16 (RAB 2018-16), issued shortly after Wayfair. RAB 2018-16 remains the primary guidance document for remote sellers evaluating their Michigan nexus obligations and addresses threshold measurement, lookback timing, and registration requirements in detail.

Calendar-Year Lookback: How Michigan Differs from Rolling-12-Month States

Michigan measures the nexus threshold on a prior-calendar-year basis. This means the Department of Treasury looks at your Michigan sales from January 1 through December 31 of the preceding year to determine whether you have a collection obligation in the current year. If you crossed either threshold during calendar year 2025, you must collect Michigan sales tax for all of 2026.

This differs significantly from states that use a rolling 12-month lookback. In rolling-12-month states (like New York or Texas), the threshold window moves continuously forward — you could trigger nexus on any given day based on the trailing 12 months of activity. Michigan's calendar-year approach is simpler to administer: you check once per year, and the answer applies for the entire following year.

The practical implications matter for growing businesses:

• Predictability — you know by January 1 whether you have a Michigan collection obligation for the year, based on the prior year's completed data
• Annual reset — if your Michigan sales drop below both thresholds in a given calendar year, you may not have nexus the following year (though you must still file returns for any period in which you were registered)
• No mid-year triggering — unlike rolling states, you cannot wake up in July having unexpectedly crossed the threshold the previous Tuesday

Michigan's Department of Treasury was among the earliest state revenue agencies to issue formal written guidance confirming that the lookback resets on January 1 each year, regardless of when a seller first crossed the threshold during the year. For a detailed comparison of how other states handle lookback periods, see the economic nexus lookback period guide.

What Michigan Considers a “Taxable Sale” for Threshold Purposes

Michigan casts a broad net when defining which sales count toward the economic nexus threshold. The threshold includes gross revenue from all sales of tangible personal property, specified digital goods, and taxable services delivered to Michigan addresses — regardless of whether the individual sale would ultimately be subject to tax after exemptions are applied.

Categories that count toward the threshold include:

The SaaS taxability question deserves special attention. Michigan treats SaaS as taxable when it constitutes the “use” of prewritten computer software, which covers most commercial SaaS products. The Department of Treasury has issued letter rulings confirming that cloud-based access to prewritten software is subject to Michigan's 6% sales tax. For SaaS companies selling into Michigan, this means your subscription revenue counts toward the nexus threshold — and once you cross it, you must collect tax on those subscriptions.

This broad definition catches more sellers than a physical-goods-only threshold would. A SaaS company with 200 Michigan subscribers paying $50/month generates $120,000 in Michigan revenue annually — well above the $100,000 threshold and easily exceeding 200 transactions.

Registration via Michigan's e-Registration Portal

Once you determine that you have Michigan economic nexus, registration is handled through the Michigan Department of Treasury's e-Registration system. The process is fully online and typically takes 10-15 minutes to complete. You will need:

• Federal Employer Identification Number (EIN) or Social Security Number for sole proprietors
• Business entity type and formation state
• Michigan sales start date (or the date you first crossed the threshold)
• Estimated monthly Michigan sales tax liability
• Business address and contact information

After submitting your registration, the Department of Treasury issues a Michigan Sales Tax License — typically within 7-10 business days for remote sellers. Unlike some states that require a bond or deposit, Michigan does not impose bonding requirements on remote sellers registering for the first time under economic nexus rules.

Filing frequency is assigned based on your estimated tax liability:

• Monthly — if estimated annual liability exceeds $3,600
• Quarterly — if estimated annual liability is between $720 and $3,600
• Annually — if estimated annual liability is below $720

Returns are filed through Michigan Treasury Online (MTO). Monthly returns are due by the 20th of the following month. Michigan offers a discount of 0.5% of the tax collected (up to $20,000 annually) for timely filing and payment — an incentive that partially offsets compliance costs for remote sellers.

The 6% Flat Rate: Michigan's Compliance Advantage

One of Michigan's most significant advantages for remote sellers is its single, statewide 6% sales tax rate with no local add-ons. Michigan is one of a handful of states that does not permit counties, cities, or special districts to levy additional sales taxes on top of the state rate.

This simplifies compliance dramatically. In Michigan, you charge 6% on every taxable sale regardless of where in the state the buyer is located. Compare this to states with layered local taxes:

For sellers using tax calculation software, Michigan's flat rate means fewer rate-lookup failures, no ZIP+4 boundary issues, and zero risk of under-collecting because a local jurisdiction changed its rate mid-year. For sellers managing tax manually, it means one rate to remember for every Michigan transaction.

This structural simplicity is why Michigan often ranks among the easiest states for remote seller compliance — even though its $100,000/200-transaction threshold is identical to many more complex states. The threshold gets you in the door; the flat rate keeps the ongoing burden low. For a full comparison of thresholds and rate structures, see the sales tax nexus thresholds by state guide.

Marketplace Facilitator Rules: When You Don't Need Separate Registration

Effective January 1, 2020, Michigan requires marketplace facilitators to collect and remit Michigan sales tax on sales they facilitate. Under MCL 205.52b(5), a marketplace facilitator that meets the economic nexus threshold ($100,000 or 200 transactions) based on all sales it facilitates into Michigan must register with the Department of Treasury and assume collection responsibility for third-party seller transactions conducted through its platform.

The practical impact for sellers: if 100% of your Michigan sales flow through a covered marketplace facilitator (Amazon, eBay, Etsy, Walmart Marketplace, etc.), you do not need to independently register with Michigan or collect tax on those sales. The facilitator handles the entire obligation — rate determination, collection, remittance, and exemption certificate management.

However, the exemption only applies to facilitator-mediated sales. If you sell through a marketplace and through your own website or direct channels, your direct-channel sales still count toward the $100,000/200-transaction threshold independently. A seller with $80,000 in Amazon-facilitated Michigan sales and $25,000 in Shopify direct sales has not crossed the threshold on direct-channel activity alone — but a seller with $150,000 on Amazon and $110,000 on Shopify has nexus based on the Shopify sales and must register.

For a complete breakdown of which platforms qualify as marketplace facilitators and how facilitator rules interact with seller obligations, see the marketplace facilitator laws by state guide.

Enforcement, Penalties, and Voluntary Disclosure

Michigan's Department of Treasury actively enforces economic nexus compliance. The Department uses 1099-K data from payment processors, shipping carrier records, and marketplace facilitator filings to identify remote sellers with Michigan nexus who have not registered. Non-compliant sellers face:

• Back taxes — the full amount of uncollected Michigan sales tax from the date your obligation began
• Interest — accruing at 1% above the prime rate, compounded annually from the original due date
• Penalties — 5% of unpaid tax for each month late (up to 25%), plus potential negligence penalties of 10% of the deficiency

Michigan offers a Voluntary Disclosure Agreement (VDA) program through the Multistate Tax Commission (MTC) for sellers who discover they have unmet obligations. Benefits of a VDA typically include a limited lookback period (generally 3-4 years instead of the full statute of limitations) and waiver of penalties in exchange for registering and remitting all tax due within the lookback window. The VDA must be initiated before the Department contacts you — once you receive a nexus questionnaire or assessment notice, the VDA option is generally unavailable.

For sellers who have been selling into Michigan since 2018 without collecting, the potential exposure spans multiple years of uncollected tax plus interest and penalties. A VDA is almost always the most cost-effective resolution — waiving penalties alone can save 25-35% of the total assessment.