If you are doing business in Michigan and either charging to your customers/patients/clients Michigan Sales Tax or paying Use Tax for purchases in the State of Michigan, this article explains a change that the State of Michigan Treasury views the taxability of delivery and installation charges.

Effective April 26, 2023 delivery and installation charges are not subject to sales tax or use tax in the State of Michigan, as long as the delivery and installation charges, if any, are stated separately on an invoice, bill of sale, receipt, or similar document provided to the purchaser, and the seller maintains its books and records to show separately the transactions used to determine the sales or use tax, as applicable. Showing the transactions separately could include a separate general ledger account or listed in a point-of-sale system as a separate sale item.

Michigan Treasury’s definition of delivery charges are charges made by the seller for the preparation and delivery to a location designated by the purchaser of tangible personal property or services and includes, but is not limited to, transportation, shipping, postage, handling, crating, and packing

Exceptions to this rule include the sale of electricity, natural or artificial gas by a utility service provider.

These are the basic changes to delivery and installation charges for Michigan Sales and Use Tax, for more information on this topic contact Polk & Associates.

Polk & Associates

Large enough to serve a diverse clientele, yet small enough to maintain a hands-on approach, we are committed to maintaining the highest accounting and ethical standards with continuous education, extensive research resources, and excellent quality control.

Polk and Associates is a member of the Michigan Association of Certified Public Accountants, and the American Institute of Certified Public Accountants. The firm participates in the AICPA Peer Review Program, and has always received the highest level of award for its audit practice and quality control.