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Michigan car sales tax at a glance
| Michigan | |
|---|---|
| Tax | sales tax (use tax on private sales and leases) |
| State rate | 6% |
| Average with local taxes (2026 (Tax Foundation midyear, July 1)) | 6% |
| Counties and cities add tax | No |
| Trade-in lowers the tax | Partly (see trade-ins below) |
| Leases | Tax on each monthly payment |
Checked on the state's official sources on 2026-11-02. Rates change; the state's revenue department has the last word.
How to work out Michigan sales tax on a car
Multiply the taxable price by the rate. In Michigan the trade-in credit is limited; the example assumes it all comes off.
A $30,000 car with a $5,000 trade: $25,000 x 6% = $1,500 at the state rate.
6% statewide, no local sales tax. Trade-in cap: $12,000 for 2026, $13,000 for 2027, $14,000 for 2028, unlimited from 2029. SB 997/998 (2026) would remove the cap but were in committee.
Trade-ins
Partial credit: the deduction is the lesser of the agreed-upon trade value or a cap of $5,000 (2019) rising $1,000 each Jan 1, so $12,000 in 2026; the full value is deductible from Jan 1, 2029 (Mich. Admin. Code R 205.15). No trade-in credit on a lease.
Leasing a car in Michigan
Tax on each monthly payment. Michigan: a lease is subject to 6% use tax (not sales tax), normally collected on each lease payment, and a trade-in gives no credit on a lease. The lease calculator uses Michigan's method when you pick the state.
Dealer doc fees
Michigan law caps the documentary preparation fee with periodic inflation adjustments.