Michigan Utility Sales Tax Exemption

Manufacturers and industrial processors with facilities located in Michigan, may be eligible for a utility tax exemption. Michigan offers an exemption from state sales tax on the purchase of electricity, natural gas, and water used in qualifying production activities. This tax exemption is authorized by MCL 205.54t(1)(a).

Exemption Language of MCL 205.54t(1)(a)

Tangible personal property is exempt from tax when used by "an industrial processor for use or consumption in industrial processing." Electricity, gas, steam and propane used in industrial processing functions or to operate industrial processing equipment/machinery are exempt. Chapter 34 - Industrial Processing Manual. March 2019.

Utility Study Requirement for Exemption Qualification

A Michigan utility tax study must list every piece of equipment and appliance (production and non-production) that uses the utility and the annual consumption of each. Failure to properly calculate or classify utility usage is cause for denial of the exemption.

Michigan Statute of Limitations on Tax Refund

4 years

State Sales Tax Rate: 6%

Average Local Sales Tax Rate: 0%

Helpful Resources

Michigan Utility Exemption Certificate: Certificate of Exemption 3372

Michigan Utility Exemption Statute/Rule: MCL 205.54t(1)(a)