What is the car sales tax rate in Michigan?

Michigan charges a flat 6% sales and use tax on motor-vehicle purchases. Unlike many states, Michigan has no local or county add-on sales tax, so 6% applies statewide regardless of where you buy or register the car.

Does a trade-in reduce my Michigan car sales tax?

Yes, but only up to an annual cap. Michigan subtracts your trade-in value from the taxable price, but the deduction is limited to a maximum amount that rises each year as the trade-in credit phases up toward an unlimited deduction.

Is the rebate or down payment taxed?

Manufacturer rebates are generally taxable in Michigan — tax is figured on the price before the rebate is applied. Your down payment does not reduce the taxable amount; it only lowers the financed balance, not the tax.

Do I pay tax on a private-party car sale?

Yes. Michigan collects 6% use tax on private-party vehicle sales when you title and register the car at the Secretary of State, based on the purchase price or the vehicle's retail value, whichever the state applies.

How accurate is this calculator?

It accurately applies the 6% rate and the capped trade-in deduction you enter. Dealer documentation fees, the exact current-year trade-in cap, and any special exemptions can affect the final amount collected by the Secretary of State.

Michigan Car Sales Tax Calculator

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Buying a car in Michigan means paying a flat 6% sales and use tax — and unlike most states, there is no local add-on, so 6% applies everywhere. Your trade-in lowers the taxable price, but only up to an annual cap that is phasing higher over time. This calculator applies both rules to estimate your tax.

How it works

The taxable amount is the price reduced by your capped trade-in:

Start with the purchase price. Use the agreed price before tax. Manufacturer rebates do not reduce it — Michigan taxes the pre-rebate price.
Subtract the capped trade-in. Your trade-in lowers the taxable price, but only up to Michigan’s annual trade-in cap.
Apply 6%. Multiply the resulting taxable amount by 0.06.

So tax = (price − min(tradeIn, cap)) × 0.06, never less than zero.

Tips and example

On a $35,000 car with a $10,000 trade-in and a trade-in cap of $9,000, the taxable amount is $35,000 − $9,000 = $26,000, so the tax is $26,000 × 6% = $1,560. Note the trade-in credit is limited to the $9,000 cap, not the full $10,000.

Michigan’s trade-in cap rises each year on its way to an unlimited deduction, so check the current limit before you buy. This calculator excludes dealer documentation fees and any special exemptions; the Secretary of State sets the final amount when you title and register the vehicle.