How taxes work in Michigan
Sales tax. Michigan charges a 6% statewide sales tax, and counties, cities and special districts add their own on top — which is why the average combined rate of about 6% is the number that matters at the till. Groceries are generally exempt from the state sales tax; local rules can differ.
Property tax. At an average effective rate of about 1.54%, a $350,000 home in Michigan carries roughly $5,390 a year in property tax before exemptions. Michigan is a high-property-tax state — factor the tax bill into affordability, not just the mortgage payment. Local assessors set actual bills, so verify with the county for any specific property.
Income tax. Flat 4.25% income tax; some cities levy their own income tax. If you are self-employed in Michigan, you still owe federal self-employment tax plus quarterly state estimates where applicable.
Sales tax · average combined
Property tax · average effective
Chart: DailyFinance.tools · Rates are reviewed averages from our state tax dataset — your exact local rate may differ.
How Michigan compares with similar states
The states closest to Michigan on average combined sales tax. Property tax is the average effective rate; income tax shows the structure, not a single rate.
| State | Combined sales tax | Property tax | Income tax |
|---|---|---|---|
| Michigan (this page) | 6% | 1.54% | Flat |
| Idaho | 6.02% | 0.69% | Flat |
| Kentucky | 6% | 0.86% | Flat |
| Maryland | 6% | 1.06% | Progressive |
| District of Columbia | 6% | 0.56% | Progressive |
| All-state average (51 entries) | 6.61% | 1.04% | — |
What this means for your money in Michigan
Property tax is the heavy line in Michigan. At an average effective rate of 1.54% — rank 11 of 51, against an all-state average of 1.04% — a $400,000 home carries about $6,160 a year, roughly $513.33 a month. Because lenders collect property tax through escrow, it raises the monthly mortgage payment directly; affordability calculations that use only principal and interest understate the cost of owning here.
Read together: Michigan combines an average combined sales tax of 6% (rank 40 of 51), an average effective property tax of 1.54% (rank 11 of 51) and a flat state income tax. A household comparing states should compare all three against its own pattern — a high earner who rents weighs the income tax most; a homeowner on a fixed income weighs the property tax most.
Major cities in Michigan
Detroit, Grand Rapids, Warren, Sterling Heights, Ann Arbor. Combined sales-tax rates differ between these cities — sometimes by more than a full percentage point inside the same state — because county and city layers stack on the state base. The Michigan sales tax guide breaks down the calculation and links the calculator where you can enter your exact local rate.
Calculators for Michigan residents
- Michigan Sales Tax Guide & Examples — what you actually pay, with worked amounts.
- Sales Tax & VAT Calculator — add or extract tax at any rate, including your exact Michigan local rate.
- Mortgage Calculator — include Michigan property tax in the monthly payment.
- Property Tax Calculator — estimate a specific property's bill.
- Self-Employment Tax Calculator — federal SE tax for Michigan freelancers.