Michigan's state tax system includes a flat individual income tax administered under the Michigan Income Tax Act (MCL 206.1 et seq.). The rate has been 4.25 percent in recent years, with a temporary reduction to 4.05 percent in 2023 following a revenue trigger provision in the law. Michigan also imposes a 6 percent Corporate Income Tax (CIT) under MCL 206.601 et seq., which replaced the Michigan Business Tax (MBT) in 2012. The MBT's complexity and volatility had been a significant compliance burden for business owners and their advisors, and the transition to the CIT simplified matters for most standard corporations, though complex pass-through structures and financial institutions operate under different rules.

Michigan's Sales Tax Act imposes a 6 percent sales tax on retail sales of tangible personal property and certain services (MCL 205.51 et seq.), and the Michigan Use Tax Act applies to purchases made outside Michigan for use within the state. Businesses selling into Michigan must evaluate nexus obligations, exemption certificate procedures, and rules governing exempt transactions such as manufacturing machinery and agricultural inputs. The Michigan Department of Treasury administers all major state taxes and conducts audits through its Revenue Administration Division. Disputes proceed through an informal conference with Treasury, and unresolved matters can be appealed to the Michigan Tax Tribunal, an independent quasi-judicial body with jurisdiction over tax disputes.