Michigan has a flat 4.25 percent individual income tax rate. There are also jurisdictions that collect local income taxes. Michigan has a flat 6.00 percent corporate income tax rate, a 6.00 percent state sales tax rate, and an average combined state and local sales tax rate of 6.00 percent. Michigan has a 1.19 percent effective property tax rate on owner-occupied housing value. Michigan does not have an estate tax or inheritance tax. Michigan’s gas tax is 53.4 cents per gallon, and its cigarette excise tax is $2.00 per pack of 20 cigarettes.
Michigan raises tax revenue primarily through property taxes (33.8 percent of total state and local tax revenue), general sales taxes (23.7 percent), and individual income taxes (22.7 percent). Michigan collects $5,413 in state and local tax collections per capita, carries $7,460 in state and local debt per capita, and has an 82 percent funded ratio of public pension plans. Michigan’s tax system ranks 16th overall on the 2026 State Tax Competitiveness Index.
Each state’s tax code is a multifaceted system with many moving parts, and Michigan is no exception. Use the tabs below to compare Michigan taxes with other states and to see how Michigan raises tax revenue. You can also browse our tax maps, which are compiled from our annual publication, Facts & Figures 2026: How Does Your State Compare?
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The State Tax Competitiveness Index enables policymakers, taxpayers, and business leaders to gauge how their states’ tax systems compare. While there are many ways to show how much state governments collect in taxes, the Index evaluates how well states structure their tax systems and provides a road map for improvement.
122 min read
Facts & Figures serves as a one-stop state tax data resource that compares all 50 states on over 40 measures of tax rates, collections, burdens, and more.
2 min read
Individual income taxes are a major source of state government revenue, accounting for more than a third of state tax collections. How do income taxes compare in your state?
9 min read
Retail sales taxes are an essential part of most states’ revenue toolkits, responsible for nearly a quarter of combined state and local tax collections.
18 min read
Forty-four states levy a corporate income tax, with top rates ranging from a 2 percent flat rate in North Carolina to an 11.5 percent top marginal rate in New Jersey. Four states—Georgia, Nebraska, North Carolina, and Pennsylvania—reduced their corporate income tax rates effective January 1, 2026.
5 min read
Property taxes are the primary tool for financing local governments. While no taxpayers in high-tax jurisdictions will be celebrating their yearly payments, property taxes are largely rooted in the benefit principle of taxation: the people paying the property tax bills are most often the ones benefiting from the services.
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Property taxes are the primary tool for financing local governments and generate a significant share of state and local revenues.
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According to recent reports, 72 percent of the current marijuana market in the US is illicit. Evidently, the federal criminalization of marijuana has failed to prevent its sale or consumption.
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As much as 98 percent of vaping products sold in the US are illicit. Most states levy an excise tax on vaping products, but these tax systems vary substantially. The result is a messy tax system covering largely illicit products, and no one knows whether taxes are being collected and remitted on most products sold nationwide.
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However well-intended they may be, sales tax holidays remain the same as they always have been—ineffective and inefficient.
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An ideal sales tax is imposed on all final consumption, both goods and services, but excludes intermediate transactions to avoid tax pyramiding.
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