How car sales tax works in Michigan
Michigan charges a flat 6% sales tax with no city or county add-ons. The big limit is the trade-in: in 2026 only $12,000 of your trade-in value lowers the tax.
- Trade-in cap: the agreed value or $12,000, whichever is less, when you buy from a licensed dealer.
- Manufacturer rebates and the doc fee are taxed. Rebates and discounts paid by the dealership itself are not.
- Doc fee cap: $280 or 5% of the cash price, whichever is less.
- Private sales: 6% of the price or the fair market value, whichever is greater, paid when you transfer the title within 15 days.
- Family: no tax on a car from a spouse, parent, sibling, child, grandparent, grandchild, step-relative or in-law.
Title and registration fees in Michigan
| Fee | Amount |
|---|---|
| Title | $15 |
| Lien notation | + $1 |
| Standard plate (first time) | $5 |
| Registration, MSRP $29,001 - $30,000 (first year) | $178 |
| Registration, MSRP $32,000 (first year) | $190 |
| Electric vehicle fee (yearly) | + $267 |
| Plug-in hybrid fee (yearly) | + $113 |
Registration is based on the car's base MSRP when it was first titled: $36 up to $6,000, rising $6 for every $1,000, to $178 at $30,000. Above $30,000 add $6 for each $1,000 or part of $1,000. The fee drops to 90% in the second year, 81% in the third and 72.9% from the fourth year on.
Example: a $32,000 new car
Price $32,000.00, $1,000.00 manufacturer rebate, $8,000.00 trade-in and a $280.00 doc fee, bought from a dealer:
| Sales tax (6%) | $1,456.80 |
| Title fee | $15.00 |
| Registration fee | $190.00 |
| License plate | $5.00 |
| Total taxes | $1,456.80 |
|---|---|
| Total government fees | $210.00 |
| Out-the-door price | $32,946.80 |
| After the trade-in, you pay | $24,946.80 |
Common mistakes
- Subtracting a trade-in worth more than $12,000 in full: only $12,000 counts in 2026.
- Forgetting that the doc fee and manufacturer rebates are part of the taxable price.
- Paying a doc fee above $280 (or above 5% of the cash price on a cheap car).
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