Michigan – Sales and Use Tax Treatment of Subcontractors for Retailers

SALT Report 3290 – The Michigan Department of Treasury released Letter Ruling 2014-1 on February 25, 2014.  The Letter Ruling explains the relationship between the General Sales Tax Act and Use Tax Act as it pertains to retailers and subcontractors.  Essentially, sales tax will apply to sales by retailers to subcontractors unless a resale or exemption certificate is collected and contractors (subcontractors) are subject to use tax as consumers if sales tax is not collected or paid.

For Further Information:             

Michigan LR2014-1 Sales Tax Treatment Subcontractors Retailers