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

Updated on Sep 5, 2023

Table of Contents

What is an excise tax in Michigan?
How to avoid excise tax in Michigan

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.

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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.

MORE:

Cost of living in Michigan

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.

Michigan Sales and Use Tax Certificate of Exemption (Form 3372)

Multistate Tax Commission’s Uniform Sales and Use Tax Certificate

Streamlined Sales and Use Tax Agreement 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.

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