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Controlling Your Taxes Your State Tax Obligations Michigan Taxes on Business Income in Michigan Personal Income Tax in Michigan
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If you are a resident or nonresident of Michigan and receive taxable income individually from property owned or business transacted in Michigan, you are subject to tax on net income. Therefore, if you are operating your business as an S corporation, partnership, limited liability company, or sole proprietorship, you will be subject to an income tax on your business income that passes through to you. In addition, in Michigan all business income is subject to the single business tax. If your company is a qualified small business, you will be allowed a credit on the single business tax, but you will still be subject to the personal income tax. See income taxes on business income for the details on the Michigan single business tax.
Michigan imposes a personal income tax at the rate of 4.35 percent of taxable income. The income subject to the state personal income tax is basically the same income that is subject to federal taxes.
