How To Pay Your Michigan Excise Tax
Michigan’s vehicle excise tax is collected as your car’s registration and titling fees which are determined by vehicle type, model year, MSRP, and more.
Written by Abbey Orzech
Reviewed by Lisa Steuer McArdle
Unlike most other states, Michigan’s excise tax on motor vehicles is not a flat rate and is instead collected as registration and titling fees determined by the details of your vehicle like its model year, sale price, and use type.
Income tax, property tax, sales tax, excise tax…there are a lot of taxes to keep straight as a Michigan resident. And it’s important to know how and when each of these is collected so you aren’t slapped with fines or even jail time for nonpayment.
Excise tax on motor vehicles in Michigan isn’t as straightforward as in many other states, so
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and go-to resource for car owners, is here to offer the Michigan excise tax breakdown. We’ll cover how it’s collected, what you should expect to pay, and the potential penalties if you don’t pay it. We’ll also show you how to save on
Michigan car insurance costs
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What is an excise tax in Michigan?
An excise tax is a type of tax applied to certain manufactured goods and is set by a state or federal government. Excise taxes are normally levied on goods that can cause harm to one's health or environment, like cigarettes and alcohol (you may hear this referred to as the “sin tax”).
Motor vehicles are usually lumped under this category because their harmful emissions take a toll on the health of the environment. The Michigan government collects excise taxes annually so vehicle owners in the Great Lakes State will need to pony up each year for the damage done through their car’s tailpipe.
It is important to note, however, that the Michigan motor vehicle excise tax is not collected under the open and obvious name “excise tax.” Rather, it’s factored into vehicle ownership through car registration and titling fees—and there isn’t a flat rate. The details of your vehicle like the model year, fuel type and weight will affect how much you owe at the Michigan DMV at the time of registration.
The state of Michigan requires drivers to renew their registration once a year, usually on their birthday, and pay a renewal fee each time. Michigan does not offer a grace period for vehicle registration renewal so be sure to check your current registration certificate or license plate tags to note their expiration date.
Calculating your excise tax payment
Since Michigan’s motor vehicle excise tax does not adhere to a fixed or flat rate, everyone’s bill will be a little different. When you initially register your vehicle, you’ll pay both a registration fee and a title fee. In general, title fees sit around $15. The registration fees, however, depend on the specifics of your vehicle.
The Michigan Department of State website has an
online registration fee calculator
you can use to get an idea of how much you will owe. It will require some information on your ride, including:- Vehicle type: bus, minivan, pickup truck, motorcycle, etc.
- Body style: two-door, four-door, station wagon, convertible, etc.
- Vehicle use: commercial, non-commercial, passenger transport, etc.
- Fuel type: regular gas, electric, hybrid, etc.
- Vehicle model year
- MSRP (Manufacturer’s Suggested Retail Price)
- Title history
- Plate type and background
And more. Gather the details of your vehicle and head to that online resource to see about how much you’ll owe in Michigan motor vehicle excise taxes.
Penalties for nonpayment
The penalties for not paying the motor vehicle excise tax in Michigan are the same as being caught without proper vehicle registration.
Typically, that offense can land you a ticket from law enforcement, fines, jail time, your vehicle being impounded, or all of the above. If it’s your first offense, you are unlikely to receive any jail time or criminal record beyond a civil infraction and up to $100 in fines. Miss your registration renewal again, though, and you may be upgraded to a misdemeanor, more fines, and up to 90 days in jail.
How to avoid excise tax in Michigan
Motor vehicle excise tax in Michigan is collected as part of your vehicle’s registration, and since vehicle registration is a must for every driver in the Great Lakes State, there isn’t a way around this particular tax.
However, you may qualify for exemptions for sales tax or use tax. These exemptions are generally given to organizations like churches, government and farmers, so if your vehicle is used exclusively for farm or church work, or was provided to you by the state or federal government, you could benefit from tax exemption.
Exemptions can also be made for use tax if you received your vehicle as a gift or purchased it directly from an immediate family member.
If you think you qualify for one of these sales or use tax exemptions, you’ll need to complete one of the appropriate following documents to file your claim.
- Multistate Tax Commission’s Uniform Sales and Use Tax Certificate
Once you’ve completed your exemption form, you’ll present it to the seller at the time of purchase. Keep in mind that the Michigan Department of Treasury won’t give you a tax exempt number as other states may, so you have to complete and present one of these certificates to see your exemption.
MORE: Michigan reckless driving
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How to save on car insurance in Michigan
As a Michigan vehicle owner, excise taxes are just one of the expenses you’ll need to handle—and that particular burden likely has nothing on the burden of your
Michigan car insurance rates
. The Great Lakes State has some of the most expensive car insurance rates in the country, but Jerry
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quotes for coverage similar to your current plan. Jerry customers save an average of over $800 per year on car insurance payments! Those are savings you can take right to the Michigan DMV when you handle your yearly excise tax renewal.
“I was struggling to find an affordable deal in Detroit, MI because insurance here is so expensive. Working withJerry, filling out the information is painless, and I connected with an agent to talk about specific plans. I definitely could not have found a better deal without Jerry!” —Marlin M.
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