Short answer
Michigan taxes vehicle sales at 6%, no local add-ons. Michigan deducts the trade-in from the taxable price only up to $12,000. The cap applies to motor-vehicle trade-ins; a recreational vehicle trade-in is deducted at its full agreed-upon value with no dollar limit. Michigan collects tax at the buyer's home-state rate, capped at Michigan's own rate. Michigan credits sales tax legally paid to another state, so the same dollars are not taxed twice. That summary is for a retail purchase from a dealer, and most states apply different rules to leases and private-party sales.
Michigan car sales tax quick facts
Last verified August 23, 2026| Sales tax rate on vehicles | 6%, no local add-ons[1] |
| Trade-in credit | Michigan deducts the trade-in from the taxable price only up to $12,000. The cap applies to motor-vehicle trade-ins; a recreational vehicle trade-in is deducted at its full agreed-upon value with no dollar limit.[2] |
| Selling to an out-of-state buyer | Michigan collects tax at the buyer's home-state rate, capped at Michigan's own rate.[3] |
| Credit for tax paid to another state | Michigan credits sales tax legally paid to another state, so the same dollars are not taxed twice.[4] |
| Dealer doc fee | Capped at $280[5] · taxable[6] |
| Temp tag for the drive home | Michigan dealers issue a 60-day in-transit permit so an out-of-state buyer can drive the vehicle home to title and register it there; $10 fee, proof of insurance required. (valid 60 days)[1] |
| Out-of-state buyer registration | Not yet verified against an official source. Confirm with the Michigan Department of Treasury. Official site → |
From the desk
Michigan phases its trade-in credit cap upward on a schedule, so the deductible amount literally changes by calendar year. A desk quoting last year's cap is leaving the customer's money on the table, and they notice.
Selling to an out-of-state buyer in Michigan
Michigan collects tax at the buyer's home-state rate, capped at Michigan's own rate.[3]
The desk's job doesn't end at the tax line. Somebody still has to chase the title, the temp tag, and the buyer's home-state registration, and Voltra's title tracking keeps that chase on one screen.
Buying in Michigan from out of state
If you live in another state and buy in Michigan, the deciding rule is where the vehicle gets registered: your home state's tax applies at registration, and what happens at the Michigan sale depends on the row above. Michigan credits sales tax legally paid to another state, so the same dollars are not taxed twice.[4]
Registration and temp tags
Michigan dealers issue a 60-day in-transit permit so an out-of-state buyer can drive the vehicle home to title and register it there; $10 fee, proof of insurance required. Validity: 60 days.[1]
Bordering states
Cross-border deals from Michigan most often involve Indiana, Ohio and Wisconsin. The combination decides the outcome, so check both states in the out-of-state checker.
Vehicle-type exceptions
Recreational vehicle trade-ins are not subject to the motor-vehicle trade-in cap: the full agreed-upon RV trade-in value is deducted from the taxable price.[2]
Sources
- www.michigan.gov/-/media/Project/Websites/sos/01preston/Dealer_Manual_Chapter_8.pdf · verified 2026-08-23
- www.michigan.gov/taxes/-/media/Project/Websites/taxes/Forms/SUW/TY2026/485_11-25.pdf · verified 2026-08-23
- www.michigan.gov/taxes/vehicle-dealers/discount-multiplier · verified 2026-08-23
- www.michigan.gov/taxes/business-taxes/sales-use-tax/information/general-faq · verified 2026-08-23
- www.michigan.gov/difs/-/media/Project/Websites/difs/Bulletins/2025/Bulletin_2025-03-CF.pdf · verified 2026-08-23
- www.michigan.gov/-/media/Project/Websites/sos/01preston/Dealer_Manual_Chapter_7.pdf · verified 2026-08-23