Business owners may also call the MEDC at (517) 373-9808. Also check with the county and/or city/village/township clerk to determine if any local licenses or registrations are required.

Locally, check into zoning and building codes. When starting or expanding a business, it is necessary to verify that the facilities you use are in compliance with all laws. To do this, first contact the city or village assessor or township clerk to assure compliance with local zoning codes. Second, contact the local building inspector to assure compliance with regulations affecting construction (e.g., building, electrical, mechanical and plumbing codes, and rules on construction, alterations, demolition, occupancy and use of buildings). If you will be operating your business out of your home, check with the city, township, village or county clerk regarding a zoning variance.

For information on trade/service marks, patents or copyrights, contact your attorney or local SBTDC.

Arrange for an Employer Identification Number (EIN). This number identifies your business for federal and state tax purposes. Many financial institutions will not open a commercial account under an assumed name without it. Sole proprietorships with no employees DO NOT require an EIN. This type of business uses the owner’s social security number for tax purposes.

An EIN must be obtained if the business is set up as a partnership, corporation, “S” corporation, non-profit organization, limited liability company, trust or estate, or a sole proprietorship that pays wages to one or more employees. Remember: if services are performed for a corporation, the owner is an employee of the corporation and subject to all employment taxes. AN EIN is required on any return, statement, or other document if you are an employer. Individuals who file Schedule C or I (form 2040) must use EINs when filing excise, employment, alcohol, tobacco or firearms returns.

An EIN form (SS-4) can be obtained at the IRS website at www.irs.gov/ . The Application should be completed early enough to allow processing time for an EIN number to be issued. To obtain an EIN immediately, call (866) 816-2065.

Just as employers must withhold tax and report it to various government agencies, so must individuals who work for themselves or are self-employed. You are self-employed if you operate a trade, business, or profession, either by yourself or as a partner.

Anyone who owns a business and has net earnings of $400 or more as the sole owner or partner is subject to the self-employment tax. The self-employment tax is a percentage of wages up to a maximum social security tax. Quarterly estimated payments are required.

As a sole proprietor or a general partner, the owner pays taxes on the income from the business on a personal income tax return with the state and federal governments. You will also file an additional schedule that identifies income and expenses of the business. Partners file a partnership return in addition to the personal income tax return, which distributes profits and losses between the partners according to the partnership agreement. Corporations pay taxes on the business income at corporate tax rates. Shareholders and employees (including paid corporation officers) pay individual income tax on any salary and dividends received from the corporation.

Most businesses are also required to make “Estimated Tax” payments on a quarterly basis for Michigan income tax, federal income tax and self-employment tax.

For more information about your tax obligations and the proper forms, contact the Michigan Department of Treasury at (800) 487-7000 and the IRS at (800) 829-1040 and online at www.irs.gov/

If your business is a corporation, it pays federal taxes on profits. You also pay an individual income tax on any salary or dividends received from the corporation. Corporations are also required to file “Estimated Tax” returns quarterly.

State Business Taxes

In Michigan, it is easy to register for taxes. Fill out one form – Registration for Michigan Taxes (Form 518). This form allows a business to register for sales, use or withholding taxes, the single business tax, motor fuel or tobacco products tax. It can be obtained by contacting the Michigan Department of Treasury, (517) 373-0888 or (800) 367-6263 or access the tax information online. Questions and answers about registering a business can also be accessed online at www.michigan.gov/treasury

Anyone who engages in the retail sale of tangible personal property (defined as any goods that can be possessed or exchanged) from a Michigan location needs a sales tax license. The Michigan sales tax is 6% of retail sales receipts. For more information on sales and use tax, contact the Michigan Department of Treasury, Sales Use and Withholding Division, Treasury Building, Lansing, MI 48909, (517) 636-4660.

State Single Business or Alternative Profits Tax: In general, all forms of business organizations pay either the Single Business Tax or the Alternative Profits Tax although business exempt from federal income taxes are generally exempt from the Single Business Tax. Commercial farming businesses are also exempt.

The Alternative Profits Tax: enacted late in 1988, provides an alternative to the Single Business Tax for any business which would qualify for the Small Business credit. Generally, this includes businesses with less than $6,000,000 in gross receipts, less than $475,000 adjusted business income for corporations or partnerships, and less than $95,000 adjusted business income for individuals. For further information on the Single Business Tax and the Alternative Profits Tax, contact Michigan Department of Treasury, Single Tax Division, Treasury Building, Lansing, MI 48909, (517) 373-3200.

Local governments in Michigan levy property taxes. Recent reforms have slashed business property taxes by an average of 33%. Since property tax rates vary by locality, it is important to consult your local city, township or village treasurer’s office. The local treasurer’s office can also provide information about other local taxes that may apply along with information about registration and payment requirements.

Note: Tax abatements may be available for industrial projects. Local governmental units make the decision whether to provide abatements and for what length of time. Applications must be filed to meet imposed time constraints.

All local units of government are required by state law to assess personal property taxes on furniture, fixtures and equipment used in a business. BUSINESS INVENTORY IS EXEMPT. The tax is assessed against the owner of the assessable personal property; this may be the business itself if the business owns the property, or it may be a lessee if the property is leased. Contact your city, village or township treasurer for reporting requirements and tax rates.

The Single Business Tax (SBT) is a modified value-added tax administered by the Michigan Department of Treasury. It was enacted to replace several business taxes, including a corporate net income tax, franchise tax, personal property tax on business inventories and others. While the SBT is Michigan’s only general business tax, 70.4% of Michigan businesses pay $1,000 or less in SBT, and 59% of all businesses pay no SBT. A business with annual gross receipts of less than $250,000 has no liability under the SBT.

Questions and answers about the Single Business Tax can be found online at www.michigan.gov/treasury or by calling Michigan Department of Treasury at (517) 636-4660.

Charter Twp. of Brighton – (810) 229-0550 or www.brightontwp.com
Cohoctah Township – (517) 546-0655
Conway Township – (517) 223-0358
Deerfield Township – (517) 546-8760
Genoa Township – (810) 227-5225 or www.genoa.org
Green Oak Township – (810) 231-1333
Hamburg Township – (810) 231-1000 or www.hamburg.mi.us
Handy Township – (517) 223-3228
Hartland Township – (810) 632-7498 www.hartlandtwp.com
Howell Township – (517) 546-2817 or www.howell.mi-twp.org
Iosco Township – (517) 223-9545
Marion Township – (517) 546-1588 or www.mariontownship.com
Oceola Township – (517) 546-3259
Putnam Township (734) 878-3131
Tyrone Township – (810) 629-8631
Unadilla Township (734) 498-2502
City of Brighton – (810) 227-1911 or www.brightoncity.org
City of Howell – (517) 546-3500 or www.cityofhowell.org
Village of Fowlerville – (517) 223-3771 or www.fowlerville.org
Village of Pinckney – (734) 878-6206