©2016 Michigan Economic Development Corporation

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Grand Papas

Incentives & Taxes

  • Incentives

    Michigan offers one of the best pro-business environments in the country. We have been ranked one of the Top 10 states for corporate tax competitiveness due to our simple, fair and efficient 6% corporate income tax and $500 million in annual business savings through the elimination of industrial personal property tax.

    Michigan provides millions of dollars in support each year for business expansions and growth through our resources, incentives and loans.

  • Personal Income Tax

    Personal Income Tax

    Michigan's personal income tax rate is one of the lowest in the nation - a flat 4.25% tax rate that is scheduled to decline in the next few years.

    More Personal Income Tax Information

    Michigan Taxes Website

  • Property Taxes

    Property Taxes

    Michigan's 2014 average non-homestead property tax rate was 49.92 mills, or $49.92 per $1,000 of assessed property, with real and personal property subject to taxation at 50% of current market value. In an ongoing effort to make the state a more attractive place for businesses to invest and grow, Michigan began phasing out its Personal Property Taxes for most businesses beginning in 2014. Businesses claiming the personal property tax exemption will instead be subject to a statewide special assessment, ranging from 0.9 to 2.4 mills, to fund essential services levied by local governments. Additional property tax abatements available to Michigan businesses include:

    • locally-negotiated abatements, including 100% new personal property exemptions available in specified communities for qualified commercial businesses. PA 328 Fact Sheet  
    • 50% abatements for up to 12 years on real property for industrial processors and "high tech" companies. PA 198 Fact Sheet 
    • abatements up to 100% for rehabilitation projects. PA 198 Fact Sheet 

    For More Property Taxes Information

  • Sales Taxes

    Sales Taxes

    The state sales tax is 6% on sales of tangible goods. No local sales taxes are allowed.

    TAX EXEMPT PURCHASES

    There is no state sales tax charged on:

    • manufacturing machinery and equipment
    • electricity and natural gas used in production
    • pollution control equipment
  • Unemployment Insurance

    Unemployment Insurance

    To protect workers who lose their jobs through no fault of their own, Michigan businesses pay unemployment insurance on the first $9,500 of wages paid to each worker in a calendar year. Established employers may pay as little as 0.06%.

    The unemployment insurance rate is based on the experience rating of the business, which varies depending on how many employees draw unemployment insurance benefits. The new employer rate is 2.7%. Once a business is established in Michigan, businesses' experience ratings vary between 0.06% and 10.3%.

    For More Information

  • Workers' Compensation

    Workers' Compensation insurance

    Michigan has a competitive workers' compensation (WC) insurance system. Michigan’s "open competition" system allows market forces to set the WC insurance rates, thus enabling companies to shop among nearly 250 insurance carriers for the best, lowest-cost options. Self-insurance, group self-insurance, deductible plans and other options are available, as well. With such a wide-range of cost-savings opportunities, Michigan businesses can play a significant role in containing or reducing their WC costs. The following sources will help you understand and navigate through the WC insurance system.

    Sources