Michigan offers one of the best pro-business environments in the country. Michigan has been ranked one of the top 10 states for corporate tax competitiveness due to a simple, fair and efficient 6% corporate income tax and $500 million in annual business savings through the elimination of industrial property tax.
Michigan provides millions of dollars in support each year for business expansions and growth through resources, incentives and loans.
Personal Income Tax
Michigan's personal 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.
Michigan's 2012 average non-homestead property tax rate was 49.54 mills, or $49.54 per $1,000 of assessed property, with real property subject to taxation at 50% of current market value. Industrial personal property is automatically exempt from 12 mills. Additional property tax abatements available to Michigan businesses include:
- 50% abatements for up to 12 years on real property for industrial processors and "high tech" companies
- abatements up to 100% for rehabilitation projects
- more than 100 sites in virtually tax-free Renaissance Zones, which effectively eliminate general property taxes
The state sales tax is 6% on sales of tangible goods. No local sales taxes are allowed.
There is no sales tax charged on: manufacturing machinery and equipment, electricity and natural gas used in production and pollution control equipment
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%.
Worker's Compensation Insurance
Michigan has a competitive worker's 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.