©2014 Michigan Economic Development Corporation

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Incentives & Taxes

  • Incentives

    Michigan has reinvented the incentive process. Instead of offering tax credits that may provide future savings based on jobs and investment targets, MEDC has programs that provide immediate benefit. Couple these innovative programs with a low 6% Corporate Income Tax and the proposed elimination of the Personal Property Tax, Michigan offers one of the best pro-business environments in the country.

    Each year, $170 million is available in incentives and assistance. Plus, $100 million is available in loans to small and midsize businesses. 

  • Personal Income Tax

    Personal Income Tax

    Michigan's personal income tax rate is one of the the lowest in the nation - a flat 4.35% tax rate that is scheduled to decline in the next few years.

    More Personal Income Tax Information

    Michigan Taxes Website

  • Property Taxes

    Property Taxes

    While tax rates vary by location, Michigan's property tax system provides automatic exemptions that effectively cut personal property taxes by:

    • 65% for industrial businesses
    • 23% for commercial businesses

    Michigan's 2012 average non-homestead property tax rate was 49.54 mills, or $49.54 per $1,000 of assessed property, with real and personal property subject to taxation at 50% of current market value. Industrial personal property is automatically exempt from 24 mills for schools, and commercial personal property is automatically exempt from 12 mills. Additional property tax abatements available to Michigan businesses include:

    • locally-negotiated abatements, including 100% new personal property exemptions available in specified communities
    • 50% abatements for up to 12 years on real and personal property for industrial processors and "high tech" companies
    • abatements up to 100% for rehabilitation projects
    • more than 100 sites in virtually tax-free Renaissance ZonesTM, which effectively eliminate general property taxes

    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