Sarah Russell of the Michigan Department of Treasury told the Farmington Hills business summit that Treasury administers a broad set of financial programs beyond tax collection, and she urged businesses to consult michigan.gov/taxes for the latest guidance because rules are changing.

On sales tax, Russell summarized Michigan law: the state rate is 6% and sales tax is destination-based, applying when tangible personal property is transferred to a final consumer in Michigan. She said businesses that collect sales tax act as fiduciaries for the state: “That business is allowed to collect the tax from the consumer, but that puts them in a fiduciary relationship with Treasury to pass that tax on through.”

Russell discussed exemptions and recent clarifications: separately itemized delivery and installation charges are not taxable if they are clearly stated on the invoice and match the business’s books (with exceptions for utilities). She cited the U.S. Supreme Court decision South Dakota v. Wayfair (2018) as the foundation for economic-activity nexus rules that allow Michigan to require remote sellers to collect tax.

On payroll and business taxes, Russell said Michigan withholding is a state income tax mechanism employers must remit (current statutory rate discussed at the event was 4.25% after recent adjustments); corporate income tax can apply to C corporations with sufficient receipts in Michigan; and flow-through entity tax is an optional, irrevocable three-year election allowing an S corporation or partnership to pay tax at the entity level.

Russell said the state will open a research-and-development tax-credit application process (for qualified R&D expenses incurred on or after Jan. 1, 2025; the credit takes effect Jan. 1, 2026) and that Michigan is replacing legacy tax systems with a commercial GenTax platform for go-live January 2026.

Russell urged businesses to file timely returns, keep records for four years, maintain current registration details with Treasury and use written power-of-attorney forms when nominating tax representatives.