Incentives & Taxes

Through a variety of programs and resources, Michigan offers personalized assistance for businesses starting, relocating or expanding operations in the state. In addition, Michigan ranks among the top 10 states for major new and expanded facilities due to a fair and efficient 6% corporate income tax and $500 million in annual business savings through the elimination of industrial personal property tax.

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Incentive Programs and Resources

Michigan has established several state and local economic development resources that provide support for companies investing and expanding their operations and workforces in Michigan communities. Some of these include: 

Michigan Business Development Program (MBDP)

The Michigan Business Development Program is available from the Michigan Strategic Fund (MSF), in cooperation with MEDC. The program is designed to provide grants, loans or other economic assistance to businesses for highly competitive projects in Michigan that create jobs and/or provide investment.

Critical Industry Program (CIP)

The Critical Industry Program provides qualified investments to qualified businesses for deal-closing, gap financing, or other economic assistance to create or retain qualified jobs as a result of a technological shift in product or production or make capital investments, or both, in Michigan.

Strategic Site Readiness Program (SSRP)

The Strategic Site Readiness Program provides financial incentives to eligible applicants to conduct eligible activities on, or related to, strategic sites and mega-strategic sites in Michigan, for the purpose of creating investment-ready sites to attract and promote investment in Michigan.

Jobs Ready Michigan 

The Jobs Ready Michigan program was created by the Michigan Strategic Fund to meet the talent needs of companies that are expanding or relocating to Michigan. The program is designed to be flexible and responsive to the specific talent needs of companies and to address the costs associated with recruiting and training individuals for occupations that are high-wage, high-skill, or high-demand.

Program awards may be used for a variety of activities related to talent recruitment and job training including, but not limited to, employee recruitment expenses, development of customized training development plans, instructor and training materials costs, purchase of equipment related to training, construction of training facilities, and on-the job training costs.

State Essential Services Assessment (SESA) Exemption and Alternative State Essential Services Incentive Programs

The State Essential Services Assessment is required for manufacturers that do not pay personal property tax on eligible manufacturing personal property. The MSF, in certain circumstances, may choose to exempt or reduce the Assessment for projects that create jobs and/or private investment in Michigan through the State Essential Services Assessment (SESA) Exemption or the Alternative State Essential Services Assessment Incentive.

Michigan Community Revitalization Program (MCRP)

MCRP is a program available from the MSF, in cooperation with MEDC, designed to promote community revitalization that will accelerate private investment in areas of historical disinvestment, contribute to Michigan’s reinvention as a vital, job-generating state, foster redevelopment of functionally obsolete or historic properties, reduce blight; and protect the natural resources of the state. 

Michigan's Site Selection Database

Learn more about available buildings and property sites throughout Michigan in our site selection real estate database. Research community information, demographic data and more to help you plan your future business success.

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Fact sheets
Find additional information on MEDC's programs and resources

Michigan Tax Information

Michigan is continually finding ways to reduce and/or maintain low taxes so businesses can operate efficiently, and thereby expand and create jobs.

Individual Income Tax

Michigan's individual 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. For more information, visit the Michigan Taxes Website.

Property Taxes

Michigan's 2017 average non-homestead property tax rate was 52.65 mills, or $52.65 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. For more information, review the PA 328 Fact Sheet.  
  • 50% abatements for up to 12 years on real property for industrial processors and "high tech" companies and abatements up to 100% for rehabilitation projects. For more information, review the PA 198 Fact Sheet. 
  • For More Property Taxes Information visit the Michigan Taxes website or the Michigan Department of Treasury's Tax Estimator.

Sales Taxes

The state sales tax is 6% on sales of tangible goods. No local sales taxes are allowed. There is no state sales tax charged on manufacturing machinery and equipment, electricity and natural gas used in production, or pollution control equipment. For more information visit the Michigan Taxes Website.

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% and once a business is established in Michigan, they experience rates varying between 0.06% and 10.3%. For more information, visit the Michigan Unemployment Insurance Agency (UIA) website.

Workers' Compensation

Michigan's "open competition" competitive workers' compensation (WC) insurance system allows market forces to set the WC insurance rates, thus enabling companies to shop among nearly 250 insurance carriers for the best options. 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 resources will help you understand and navigate through the WC insurance system: