Every state that has a sales tax has a companion tax for purchases made outside that state, by catalog or over the Internet. In Michigan, that companion tax is called the "use tax," but might be described more accurately as a remote sales tax because it is a 6% tax owed on purchases made outside of Michigan.
Use tax is due on catalog, telephone, or Internet purchases made from out-of-state sellers as well as purchases while traveling in foreign countries when the items are to be brought into Michigan. Use tax must be paid on the total price (including shipping and handling charges).
How to Pay Use Tax
Use Worksheet 1 below to calculate your tax and enter the amount of tax due on MI-1040, line 22.
WORKSHEET 1 – USE TAX
Line 1: Itemized purchases of $0 to $1,000 x 6% (.06) OR Use Tax table amount
Line 2: Single purchases $1,000 or more x 6% (.06)
Line 3: Total Use Tax Due (add Lines 1 and 2)
Enter amount from Line 3 above on your 2011 MI-1040, line 22.
Adjusted Gross Income
Mutliply AGI by .08% (0.0008)
Use Tax on the Difference
If you paid at least 6 percent to another state on your purchase, you do not owe use tax to Michigan. If you paid less than 6 percent, you owe the difference. Note: The full 6 percent use tax is owed on purchases made in a foreign country.
For additional information regarding Michigan Use Tax, please click here.