Michigan imposes various requirements on purchasers doing business in Michigan. We recommend that you go through the items below to help you with the most frequently asked questions concerning purchasers and sales and use tax issues.

Tax exemption certificates. An exemption certificate may be issued by a purchaser of a nontaxable item. The exemption certificate may be based on the type of transaction (such as a resale exemption) or on the item itself. Exempt nonprofit organizations must present one of two forms of proof of exemption:

• the exemption ruling letter signed by the administrator of the Sales Tax Division, or
• a copy of the transferee's federal exemption letter along with a signed statement stating that the property is to be used in connection with the operation of the organization and that the organization qualifies as an exempt organization

Resale exemptions. Generally, a sale for resale is not considered a "retail sale" or a "sale at retail" and therefore is not subject to tax. The seller must obtain an exemption certificate from you, the purchaser, to be relieved of the duty to collect tax on a sale for resale.

Resale exemption certificate. When the resale exemption is claimed on a transaction, the seller is responsible for keeping a record of:

• your name and address (the person to whom the sale is made)
• the date of the sale
• the article purchased
• the use to be made of the article
• the amount of the sale
• your (the buyer's) sales tax license number (if available)

Records must be retained for four years.

Blanket resale certificates. As a purchaser making recurring exempt purchases of the same type from the same retailer, a majority of states do not require you to secure a separate exemption certificate for each transaction but allow you to use a blanket exemption certificate covering future purchases. In Michigan, a valid sales tax exemption certificate includes a blanket exemption certificate. This blanket exemption certificate covers all exempt transfers between a buyer and a seller for a period of three years or for an agreed-upon, stated shorter period of time. The blanket certificate must be on a form prescribed by the Department of Treasury.

Purchases from out-of-state vendors. In Michigan a credit is allowed for sales or use tax paid in another state for tangible personal property used in Michigan. If the tax paid is less than what Michigan would have imposed, the difference is paid to Michigan.