Michigan Department of Treasury Form Instructions
Form 5081 — Michigan Sales, Use & Withholding Taxes Annual Return (instructions)
preamble
Michigan Department of Treasury This form cannot be used as an5081 (Rev. 04-24), Page 1 of 2 amended return; see the2025 Sales, Use and Withholding2025 Sales, Use and Withholding Taxes Annual Return Taxes Amended Annual Return Issued under authority of Public Acts 167 of 1933, 94 of 1937, and 281 of 1967, all as amended. (Form 5082). File this return by February 28, 2026. Do not use this form to replace a monthly/quarterly return. T axpayer's Business Name Business Account Number (FEIN or TR Number) Street Address City State ZIP Code PART 1: SALES AND USE TAX 1. T otal gross Michigan sales for tax year being reported ........................... 2. Rentals of tangible property and accommodations ................................. 3. T elecommunications services.................................................................. 4. Add lines 1, 2 and 3................................................................................. 1. 2. 3. 4. A. Sales B. Use: Sales & Rentals
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5.ALLOWABLE DEDUCTIONS a. Resale, sublease or subrent............................................................. 5a. b. Industrial processing exemption ....................................................... 5b. c. Agricultural production exemption .................................................... 5c. d. Interstate commerce......................................................................... 5d. e. Separately itemized nontaxable service charges ............................. 5e. f. Bad debts ......................................................................................... 5f. g. Food for human/home consumption................................................. 5g. h. Government exemption .................................................................... 5h. i. Michigan motor fuel tax .................................................................... 5i. j. Delivery and installation exemption .................................................. 5j. k. Other exemptions and/or deductions (see instructions) ................... 5k. l. T ax included in gross sales............................................................... 5l. m. T otal allowable deductions. Add lines 5a - 5l. ................................... 5m. 6. T axable balance. Subtract line 5m from line 4......................................... 6. 7. Gross tax due. Multiply line 6 by 6% (0.06). ............................................ 7. 8. T ax collected in excess of line 7 .............................................................. 8. 9. T ax due before discount allowed. Add lines 7 and 8................................ 9. 10. T otal discount allowed (see instructions) ................................................. 10. A. Sales Tax B. Use Tax
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+ 0000 2025 68 01 27 6 Continue on page 2.
2025 Form 5081, Page 2 of 2 T axpayer's Business Name Business Account Number 11. 12. A. Sales Tax B. Use Tax 11. T otal tax due. Subtract line 10 from line 9 ............................................... 12. T ax payments and credits in current year (after discounts) ..................... PART 2: USE TAX ON ITEMS PURCHASED FOR BUSINESS OR PERSONAL USE 13. Purchases for which no tax was paid or inventory purchased or withdrawn for business or personal use .... 13. 14. T otal use tax on purchases due. Multiply Line 13 by 6% (0.06) ..................................................................... 14. 15. Use tax paid on purchases and withdrawals in current year .......................................................................... 15. PART 3: WITHHOLDING TAX 16. Gross Michigan payroll, pension and other taxable compensation ................................................................ 16. 17. T otal number of W-2 and 1099 forms ............................................................................. 17. 18. T otal Michigan income tax withheld per W-2 and 1099 forms ........................................................................ 18. 19. T otal Michigan income tax withholding paid during current tax year .............................................................. 19. PART 4: SUMMARY 20. T otal sales, use and withholding tax due. Add lines 11A, 11B, 14 and 18 ...................................................... 20. 21. T otal sales, use and withholding tax paid. Add lines 12A, 12B, 15 and 19..................................................... 21. 22.If line 21 is greater than line 20, enter the dierence here. If not, skip to line 25 ........................................... 22. 23. Amount of line 22 to be credited forward to a future period............................................................................ 23. 24.REFUND.Subtract line 23 from line 22.......................................................................................................... 24. 25. If line 21 is less than 20, enter balance due ................................................................................................... 25. 26.Penalty for lateling or late payment (see instructions)................................................................................. 26. 27. Interest for late payment (see instructions) .................................................................................................... 27. 28.TOTAL PAYMENT DUE.Add lines 25, 26 and 27.......................................................................................... 28. PART 5: SIGNATURE (All information below is required.) Taxpayer Certification. I declare under penalty of perjury that the information in this return and attachments is true and complete to the best of my knowledge. Preparer Certification. I declare under penalty of perjury that this return is based on all information of which I have any knowledge. By checking this box, I authorize Treasury to discuss my return with my preparer. Preparer's Signature Signature of T axpayer or Official Representative (must be Owner, Officer, Member, Manager, or Partner) Preparer's Business Name and Address Print T axpayer or Official Representative's Name Date Title T elephone Number Preparer's PTIN, FEIN or SSN Preparer's T elephone Number File and pay this return for free on Michigan Treasury Online atmto.treasury.michigan.gov. Alternatively, make check payable to"State of Michigan."Write theaccount number, "SUW Annual"andtax yearon the check. Send the return and payment due to:Michigan Department of Treasury, P .O. Box 30401, Lansing, MI 48909-7901 + 0000 2025 68 02 27 4
2025 Form 5081, Page 3 Instructions for2025 Sales, Use and Withholding Taxes Annual Return(Form 5081) Form 5081 is available for submission electronically using Michigan Treasury Online (MTO) at mto.treasury.michigan.govor by using approved tax preparation software. Most taxpayers will have the option to file the Annual EZ form, reducing the amount of fields needed to complete. Visit MTO to see if you qualify. NOTE: The address field on this form is required to be completedbut will not be used to replace an existing valid address for the purpose of correspondence or refunds. Update address and other registration information using MTO or mail a completedNotice of Change or Discontinuance(Form 163). IMPORTANT:This is a return for sales tax, use tax and/ or withholding tax. If the taxpayer inserts a zero on or leaves blank any line reporting sales tax, use tax or withholding tax, the taxpayer is certifying that no tax is owed for that tax type.Only enter figures for taxes the business is registered and/or liable for.If it is determined that tax is owed the taxpayer will be liable for the deficiency as well as penalty and interest. PART 1: SALES AND USE TAX Lines 1 through 4: Nexus and Reporting Requirements: For information about determining whether a person has nexus with Michigan, see Revenue Administrative Bulletins (RAB) 2021-21 and 2021-22. Also visit www.michigan.gov/remotesellersfor guidance for remote sellers and marketplace sellers, including FAQs. Tax Included in Gross Sales Method ("TIGS method"): Michigan sales tax (and use tax reported in this section, if applicable) is imposed on the seller. However, a seller is authorized to collect the tax at the point of sale from the customers. Sellers that separately state the tax (for example, on a receipt) and track their sales and tax separately in their books and records should report sales in this sectionwithout tax included and should leave line 5l blank. Other taxpayers prefer to charge their customers one amount that includes tax (they do not separately state the tax) yet still account for the tax in their books and records. These taxpayers are allowed, but are not required, to use the TIGS method. The TIGS method means that the taxpayer reports its gross sales on lines 1 through 4withthe tax included and uses line 5l to calculate and deduct the tax that was included. See line 5l for further instruction. A seller that did not collect the tax at the point of sale from its customers is not permitted to use the TIGS method.
Line 1A: SALES TAX - Total Gross Sales for the Tax
Year:This line should be used by sellers with nexus to report sales of tangible personal property where ownership transfers in Michigan. This includes sellers with nexus through physical presence or economic presence (remote sales). Enter total sales, including cash and installment transactions, of tangible personal property. Include: Any costs incurred before ownership of the property is transferred to the buyer, including installation, shipping, handling, and delivery charges. Trade-in allowances if you are a vehicle dealer. Do not report: Nontaxable services that do not involve the sale or lease of tangible personal property. Sales made through a marketplace facilitator, if you are a marketplace seller. Line 1B: USE TAX - Total Sales for the Tax Year:This line should be used by: Sellers with nexus to report sales of tangible personal property sourced to Michigan, for which ownership transfers outside Michigan, or Remote sellers without nexus who voluntarily collect Michigan tax. Enter total sales, including cash, credit, and installment transactions, of tangible personal property. However, marketplace sellers should not report sales made through a marketplace facilitator.
Line 2B: USE TAX - Rentals of Tangible Personal
Property and Accommodations. Marketplace sellers:Do not report sales made through a marketplace facilitator. Lessors of tangible personal property:Lessors that have made a valid election under MCL 205.95(4) and MAC R 205.132(1) should report receipts from rentals of that tangible personal property under the election. Persons providing accommodations:This includes but is not limited to total hotel, motel, and vacation home rentals, and assessments imposed under the Convention and Tourism Act, the Convention Facility Development Act, the Regional Tourism Marketing Act, and the Community Convention or Tourism Marketing Act. Line 3B: USE TAX - Telecommunications Services.Enter gross income from telecommunications services. Line 5a-5l: Allowable Exemptions and/or Deductions.Use lines 5a - 5l to deduct from gross sales the nontaxable sales included in line 4. Deductions taken for tax exempt sales must be substantiated in business records. A completed copy ofMichigan Sales and Use Tax Certificate of Exemption (Form 3372) or the same information in another format must be obtained from the purchaser. For more information on exemption documentation, see Revenue Administrative Bulletin (RAB) 2022-19. Line 5a: Resale, Sublease or Subrent.Enter resale, sublease or subrent exemption claims. Line 5b: Industrial Processing Exemption.The sale or lease of tangible personal property ultimately used in
2025 Form 5081, Page 4 industrial processing by an industrial processor is exempt. In such cases, the exemption is limited to the percentage of Industrial processing is the activity of converting or exempt use to total use determined by a reasonable formula conditioning tangible personal property by changing its or method approved (but not required to be pre-approved) form, composition, quality, combination, or character. In by Treasury. For more information, see MCL 205.54a and general, all of the following must be met: 205.94. Property must be used in producing a product for Line 5d: Interstate Commerce.Enter sales made in ultimate sale at retail, interstate commerce. To claim such a deduction, the property must be delivered by the business to the out-of-stateProperty must be sold or leased to an industrial purchaser. Property transported out-of-state by the purchaserprocessor, including a person that performs industrial does not qualify as interstate commerce. Documentation ofprocessing on behalf of another industrial processor or out-of-state shipments must be retained in business records toperforms industrial processing on property that will be support this deduction.incorporated into a product for ultimate sale at retail, and Line 5e: Separately Itemized Nontaxable Service Activity starts when property begins moving from raw Charges.Enter separately itemized labor or service chargesmaterials storage to begin industrial processing and ends involved in maintenance and repair work on property ownedwhen finished goods first come to rest in finished goods by others if these charges were included in gross sales oninventory. line 1. Do not subtract any other service necessary toIf property is used for both an exempt and a taxable purpose, complete the sale of taxable property or any delivery orthe property is only exempt to the extent that it is used for installation charges that were incurred before the completionan exempt purpose. In such cases, the exemption is limited of transfer of ownership of the property.to the percentage of exempt use to total use determined by a Line 5f: Bad Debts.Bad debts may be eligible for areasonable formula or method approved (but not required to deduction if the following criteria are met:be pre-approved) by Treasury. For exceptions and exclusions, see MCL 205.54t and 205.94o. The debts are charged off as uncollectible on business books and records at the time the debts becomeLine 5c: Agricultural Production Exemption.Property worthlessmust be directly or indirectly used in agricultural production. Generally, the following non-exhaustive listmay beexempt:The debts are deducted on the return for the period during which the bad debts are written off as(i) Tangible personal property sold or leased to a person uncollectibleengaged in a business enterprise that uses or consumes the property for either: The debts are or would be eligible to be deducted for federal income tax purposes. Tilling, planting, draining, caring for, maintaining, or harvesting things of the soil, or A bad debt deduction may be claimed by a third-party lender if the retailer who reported the tax and the lender financingBreeding, raising, or caring for livestock, poultry, or the sale timely execute and maintain a separate writtenhorticultural products. election designating which party may claim the deduction.(ii) To the extent that the property is affixed to and made Certain additional conditions must be met. See MCL 205.54i,a structural part of real estate for others and used for an 205.99a, and RAB 2019-3.exempt purpose in (i), tangible personal property sold to a Line 5g: Food for Human/Home Consumption.Enter thecontractor that is one of the following: total of retail sales of grocery-type food, excluding tobacco, Agricultural land tile marihuana products, and alcoholic beverages. Prepared food Subsurface irrigation pipe is subject to tax. See MCL 205.54g and MCL 205.94d for more information.Portable grain bins Line 5h: Government Exemption.Direct sales to theGrain drying equipment and its fuel or energy source United States government or the state of Michigan or itsHowever, the following sales from (i) or (ii)are notexempt: political subdivisions are exempt. Food, fuel, clothing, or similar property for personal Line 5i: Michigan Motor Fuel Tax.Motor fuel retailersliving or human consumption, or may deduct the Michigan motor fuel taxes that were included Property permanently affixed to and becoming a in gross sales on line 1 and paid to the State or the distributor. structural part of real estate unless it is agricultural land Line 5j: Delivery and Installation Exemption.Entertile, subsurface irrigation pipe, a portable grain bin, or itemized delivery and installation charges included in grossgrain drying equipment. Certain property that can be sales. Public Acts 20 and 21 of 2023 state that delivery anddisassembled and reassembled may be exempt. installation charges are exempt from sales and use taxes Some specific types of exempt property and exempt uses of when charges are separately stated on the invoice, bill of sale, property are clarified in the statute. If property is used for or similar document and the seller maintains its books and both an exempt and a taxable purpose, the property is only records to show separately from the transaction. Delivery exempt to the extent that it is used for an exempt purpose. and installation charges that fail to satisfy these conditions or
2025 Form 5081, Page 5 that involve, or are related to, the sale of electricity, natural Vehicle sales to non-reciprocal states for which no tax gas, or artificial gas by a utility remain subject to sales tax was paid to Secretary of State. and use tax unless otherwise exempt. See Notice Regarding Qualified nonprofit organizations with aggregate sales in Changes in the Taxability of Delivery and Installation the calendar year of less than $25,000 may exempt the Charges for Sales and Use Taxes. first $10,000 of sales for fundraising purposes. Line 5k: Other Exemptions and/or Deductions.Identify Separately, veterans organizations exempt under IRC exemptions or deductions not covered in items 5a through 5j 501(c)(19) may exempt sales for the purpose of raising on this line. Examples of exemptions or deductions are: funds for the benefit of an active duty service member or veteran, up to $25,000 per event.Trade in deduction.When the trade-in value of a motor vehicle is less than the Michigan trade-in allowance, use Direct Pay Exemption. Enter sales made to purchasers the trade-in value for the allowable deduction. When the that claimed direct pay exemption from sales and use trade-in value of a motor vehicle is equal to or greater taxes. Purchasers claiming direct pay exemption from than the Michigan trade-in allowance, use the Michigan sales and use taxes on qualified transactions may provide trade-in allowance amount for the allowable deduction. sellers theMichigan Sales and Use Tax Certificate of Trade-ins of RVs and watercraft are not subject to Exemption(Form 3372), the same information in another limitation. Visit the Sales and Use Taxes FAQ page at format, the Uniform Sales and Use Tax Certificate michigan.gov/taxesfor trade-in limits.Taxes paid to approved by the Multistate Tax Commission, or the Secretary of State are not reported here.Instead, they Streamlined Sales and Use Tax agreement Certificate of are reported on theVehicle Dealer Supplemental Exemption. MCL 205.98. Schedule(Form 5086, e-file only). Line 5l: Tax Included in Gross Sales.Complete this line Credit for the core charge attributable to a recycling fee, onlyif you reported sales on lines 1 through 4 with the deposit, or disposal fee for a motor vehicle or recreational tax included and you collected tax that was not separately vehicle part or battery if the recycling fee, deposit, or stated from your customers (you used the Tax in Gross Sales disposal fee is separately stated on the invoice, bill of Method-see above line 1). If these conditions apply, all tax sale, or similar document given to the purchaser. will be deducted on this line so that line 7, "Gross tax due", calculates correctly. Subtract lines 5a through 5k from line 4,Direct sales, not for resale, to certain nonprofit agencies, then divide the difference by 17.6667. Enter the result on linechurches, schools, hospitals, and homes for the care of 5l.children and the aged, to the extent the property is used to carry out the nonprofit purpose of the organization. Example:Joe sells t-shirts for $9.43 each and collects For sales to certain nonprofit agencies, the exemption is sales tax from customers. Therefore, he generally collects limited based on the sales price of property used to raise $10 ($9.43 + 0.57 tax) from each customer. Joe chose to funds or obtain resources. All sales must be paid for not separately state the tax to his customers. Ten t-shirts directly from the funds of the exempt organization to were sold during the year. One of those t-shirts was sold to qualify. someone who would resell the t-shirt and who provided an exemption claim; therefore, that sale was not subject to salesAssessments imposed under the Convention and Tourism tax and Joe collected just $9.43.Act, the Convention Facility Development Act, the Regional Tourism Marketing Act, or the Community Option 1:Joe reports his total sales on line 1 and 4 without Convention or Tourism Marketing Act. Hotels and motels the tax included; therefore, he leaves line 5l blank. Joe's may deduct the assessments included in gross sales and return is completed (in part) as follows: rentals if use tax on the assessments was not charged to *Line 1 = 10 shirts @ $9.43the customers. Credits allowed to customers for sales tax originally paid Line:on merchandise voluntarily returned, provided the return is made within the time period for returns stated in the taxpayer's refund policy or 180 days after the initial sale, whichever is earlier. Repossessions are not allowable deductions. Sales to contractors of materials which will become part of a finished structure for a qualified exempt nonprofit hospital, qualified exempt nonprofit housing entity or church sanctuary, or materials to be affixed to and made a structural part of real estate located in another state. The purchaser will provide aMichigan Sales and Use Tax Contractor Eligibility Statement(Form 3520). See RAB 2016-18. Amount: 1 94.30* 4 94.30 5a 9.43 5l 5m 9.43 6 84.87 7 5.09 8 0.04 9 5.13
2025 Form 5081, Page 6 Option 2:Joe reports his total sales on line 1 and 4 with the returns to this return. Instead, seeMichigan Income Tax tax included;therefore, he is using the TIGS method and Withholding Guide(Form 446), to report that information. needs to remove the tax from his tax base using line 5l. Line 18:Enter the total Michigan income tax withheld forJoe's return is completed (in part) as follows: the return year. ** Line 1 = (9 shirts @ $10.00) + (1 shirt @ $9.43) Line 19:Enter the total Michigan income tax withholding previously paid for the return year. (Do not include penaltyLine: Amount: 1 99.43** 4 99.43 5a 9.43 5l 5.09 5m 14.52 6 84.91 7 5.09 8 0.04 9 5.13
Line 8:If more tax was collected than the amount on line
7, enter the difference. This line is used to report differences due to the rounding of numerous transactions. In addition, tax over-collected by a seller is required by law to paid to Treasury, unless refunded to the customer(s), and must be reported here. Line 10: Total Discount Allowed for Timely Payments. Annual filers: Enter $72 if the tax due on line 9 is $108 or more. If tax due is less than $108, calculate the discount by multiplying line 9 by 2/3 (0.6667). Accelerated/Monthly/Quarterly filers:Enter total discounts allowed for the year.
Line 12:Enter total payments plus credits from2025 Fuel
Supplier and Wholesaler Prepaid Sales Tax Schedule (Form 5083),2025 Fuel Retailer Supplemental Schedule (Form 5085), and2025 V ehicle Dealer Supplemental Schedule(Form 5086), if applicable, made for the current tax year. Note:all prepaid sales tax schedules are e-file only. PART 2: USE TAX ON ITEMS PURCHASED FOR
BUSINESS OR PERSONAL USE
Line 13:Unless a specific exemption applies enter purchases for which no sales or use tax was paid, including property withdrawn for business or personal use. See Michigan Use Tax Act, 1937 PA 94, for information on various exemptions. For questions contact Michigan Department of Treasury at 517-636-4230. For Manufacturer/Contractors, alternative measures of the use tax base should be reported (see MCL 205.93a(1)(f) and (g) and RAB 2016-24 for more information). For all other taxpayers, report the "purchase price" as defined in MCL 205.92(f). PART 3: WITHHOLDING TAX Line 17:Enter the number of your W-2 and 1099 statements. Do not attach copies of W-2s, 1099s, or any other information and interest.) PART 4: SUMMARY Line 24:Enter the amount of overpayment from line 22 to be refunded. Refunds will not be made in amounts of less than $1. Line 25:If line 21 (tax paid) is less than line 20 (tax due), enter the additional tax due. Pay any amount greater than or equal to $1. Line 28: Total Payment Due.Add lines 25, 26 and 27. Submit payments electronically on MTO or make check payable to"State of Michigan."Write theaccount number, "SUW Annual"andthe tax yearon the check. Do not pay if the amount due is less than $1. How to Compute Penalty and Interest If the return is filed after February 28 and no tax is due, compute penalty at $10 per day up to a maximum of $400. If the return is filed with additional tax due, include penalty and interest with the payment. Penalty is 5% of the tax due and increases by an additional 5% per month or fraction thereof, after the second month, to a maximum of 25%. Interest is charged daily using the average prime rate, plus 1 percent. Refer towww.michigan.gov/taxesfor current interest rate information or help in calculating late payment fees. PART 5: SIGNATURE REMINDER:Taxpayers must sign and date returns. Preparers must provide a Preparer Taxpayer Identification Number (PTIN), Social Security Number (SSN) or Preparer Firm ID (FEIN), as well as business name, business address and phone number. Annual Return Reporting Taxpayers are encouraged to file electronically using MTO or approved tax preparation software. Visit mto.treasury.michigan.govfor more information. Taxpayers with 250 or more employees must file their withholding return electronically. Do not include wage statements with your mailed annual return. 1099 and Income Record Form Reporting Overview."Income record forms" are defined as Michigan copies of Forms W-2, W-2C, W-2 G, 1099-R, 1099-MISC, and 1099-NEC. "Wage statements" are a sub-set of these forms, that is, Michigan copies of Forms W-2, W-2C. The IRS refers to the federal version of income record forms as "information returns." W-2s.Employers required by federal law to file Form W-2, Wage and Tax Statement, must provide a copy to the
State of Michigan if the Form W-2 is issued to a Michigan If the withholding error occurs before a W-2 is issued, adjust resident employee, to report work performed in Michigan, a later paycheck and make the same adjustment in the next or to report Michigan income tax withheld. For more about payment due to Treasury. federal requirements, see IRSPublication 15, (Circular E), W-2Gs.Michigan casinos, racetracks, and off-track betting Employer's Tax Guideor visitwww.irs.gov. facilities may be required to report winnings of, and Correcting W-2 Errors.If the error was due to withholding for, nonresidents of Michigan. See the associated underreporting withholding on the original W-2, issue information in the "Other Withholding" section for more a corrected W-2 and send a copy to Treasury. As provided information. in Mich Admin Code, R 206.22(3)(b), the employer can 1099s.Persons required by the internal revenue code to issue only receive a refund if the original W-2 is recovered from certain 1099 forms (specifically, 1099-R, 1099-MISC, and the employee. When an employee retains the original, 1099-NEC) must file a copy with the State of Michigan of erroneous W-2, the employee, not the employer, must request each form issued to a Michigan resident, regardless where the refund. The corrected form should be clearly marked the issuer is domiciled or where the resident's work or "Corrected by the Employer". services were performed. 1099 state copies must also be sent If the error was due to overreporting withholding on the to Michigan if the form reports Michigan withholding. For original W-2, do not issue a corrected W-2. This type of more information about who is required to issue 1099s, see correction must be handled in one of the following ways (see www.irs.gov. Rule 206.22): Due Dates.State copies of most income statements are 1) The employer may repay the amount withheld in error due to the Michigan Department of Treasury on or before to the employee anytime within the same calendar year. January 31. The exceptions to this general rule are paper The employer shall obtain a receipt from the employee filed Form 1099-MISCs, which are due February 28, and and keep in business records. The employer may adjust electronically filed Form 1099-MISCs, which are due March their records and deduct the amount refunded from the 31. Late filing is subject to penalty. Treasury does not have tax owing on his next return or ask for a cash refund. the authority to grant an extension of these due dates. 2) If the employer does not repay the employee as noted Tax Assistance above, the employee may claim a credit for the amount For assistance, call 517-636-6925. Assistance is availablewithheld on their individual income tax return (Form using TTY through the Michigan Relay Center by callingMI-1040). 711. If an issued W-2 is lost or destroyed, provide the employee with a substitute copy clearly marked "Reissued by Employer".
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