Get Michigan Tax Clearance For Sole Proprietorship Form

File Form 5156, Request for Tax Clearance Application if you: Want to know your current total tax liability with the Michigan Department of Treasury. Are selling all or part of your business. Are dissolving or withdrawing a corporation from Michigan.

Use this form only if you discontinued or made changes to your business. Complete all sections that apply. Changes provided on this form may also be completed electronically at mto.treasury.michigan.gov.

Because there's no distinction between the owner and the business itself, sole proprietors don't need to file business tax returns ― they instead simply claim any business profits or losses on their personal tax returns.

Sole proprietor: If you are a sole proprietor, your business income and expenses should be reported on Schedule C. You'll be responsible for paying self-employment taxes—such as Social Security and Medicare.

Michigan has a 6.00 percent corporate income tax rate. Michigan has a 6.00 percent state sales tax rate and does not levy any local sales taxes. Michigan's tax system ranks 12th overall on our 2022 State Business Tax Climate Index.

The Michigan Business Tax (MBT), which was signed into law by Governor Jennifer M. Granholm July 12, 2007, imposes a 4.95% business income tax and a modified gross receipts tax at the rate of 0.8%. Insurance companies and financial institutions pay alternate taxes (see below).

Conditional tax clearance is granted after the Department of Treasury determines that all Sales, Use, Income (Withholding), Cigarette, Motor Fuel, Single Business and Michigan Business Taxes have been paid for the period of operation.