Inventory Tax
In the state of Michigan, there is no inventory tax, no matter where you locate.  All inventory is exempt from state and local taxes.

Michigan Business Tax
On January 1, 2008, Michigan implemented a new business tax system. The Michigan Business Tax (MBT) replaced the Single Business Tax (SBT). Under the new structure, nearly 7 out of 10 Michigan businesses (including numerous small businesses and manufacturers) will receive tax cuts. A business with gross receipts of $350,000 or less does not have to file a tax return or pay any tax. The MBT is a simplified tax system based on business income and gross receipts, plus an added surcharge.

The Michigan Business Tax (Source:  MEDC)
State of Michigan Business Taxes (Source:  MEDC)

Property Tax
Homesteads are defined as primary residences that are officially occupied by May 1 of the recorded year. All other residences, including secondary residences, are considered non-homestead.

Property taxes are levied as a millage rate. (A mill equals one dollar of assessed property, property is assessed at 50% of market value.) These taxes are levied on two types of property in the State of Michigan, "real property" (land and buildings) and "personal property" (machines, equipment, fixtures and signs used by businesses). Each year, the City Assessor's office estimates the value of all property in the city -- both real and personal -- as of December 31, otherwise known as "tax day." The valuation and condition of the owner's property on this date is used to determine its value. A "Notice of Assessment, Taxable Valuation and Property Classification" is then sent to all property owners about March 1. The notice indicates three values for each property: 

• Assessed Value is equal to approximately half of the estimated market value of the property.
• State Equalized Value (SEV) is the Assessed Value multiplied by an "equalization factor," a number that is determined by the County Equalization Department which is usually 1. Therefore, Assessed Value and State Equalized Value are usually the same.
• Taxable Value is the value used to compute the taxes on the property.

Property taxes are calculated using the following formula:  Taxable Value ÷ $1,000 x millage rate = Tax Levy (amount of taxes to be paid).

Also of note, annual property assessment increases are limited by the State Constitution to the lesser of 5% or the rate of inflation.

As a benefit to businesses, property tax exemptions are available for:

1. Special tools, dies, jigs and patterns in manufacturing
2. Electricity and natural gas used in production
3. Air and water pollution control abatement equipment.

For the most current millage rates from the Kalamazoo County Equalization Department, click here.

Sales Tax
Michigan has a 6% state sales tax and allows no local sales tax. Many industrial and consumer goods transactions are exempt from Michigan sales taxes, including food, prescription drugs, medical devices, newspapers and periodicals, water and commercial vessels. Also, exempt from sales tax are sales for resale of property in interstate or foreign commerce, computers used in industrial processing, custom computer software, information services, railroad rolling stock, air and water pollution control facilities and energy fuels. Machinery and material used directly in a manufacturing process are also exempt.