Michigan City Income Tax: All 24 Cities, Rates and What Businesses Owe
Michigan City Income Tax: All 24 Cities, Rates and What Businesses Owe
Michigan has a state income tax, but no statewide business license, and only 24 cities levy a local income tax on top of it. If your business, your employees or your own paycheck fall inside one of those city limits, you have city filing and withholding duties that the state entity filings do not cover. This guide lists the 24 cities, the 2026 rates we could verify, and what businesses generally owe.
Disclaimer: This resource guide is informational only. It is not legal or tax advice. City rates and rules change, so confirm every figure with the city's income tax office before you file. For entity elections, multi-city operations or residency questions, talk with a qualified CPA or attorney.
How the Michigan City Income Tax Works
Only cities can levy an income tax in Michigan. Villages and townships cannot. A business located in a township or village outside the 24 cities generally has no city income tax to file. The state individual income tax is separate. For the 2026 tax year it is a flat 4.25%, and it is filed with the state, not the city.
City tax works in two directions. Residents of a taxing city owe on their income, and nonresidents owe at a lower rate on income connected to work in the city. Cities also tax business income, and they require employers to withhold city tax from employee wages. Withholding is the duty new employers most often miss.
The 24 Michigan Cities With an Income Tax
The Michigan Department of Treasury publishes the list of cities that levy an income tax. The 24 cities are:
- Albion
- Battle Creek
- Benton Harbor
- Big Rapids
- Detroit
- East Lansing
- Flint
- Grand Rapids
- Grayling
- Hamtramck
- Highland Park
- Hudson
- Ionia
- Jackson
- Lansing
- Lapeer
- Muskegon
- Muskegon Heights
- Pontiac
- Port Huron
- Portland
- Saginaw
- Springfield
- Walker
2026 Rates by City
City rates are not uniform. The table shows the figures we could verify. Saginaw's rates come from the city's own FAQ. The 1% and 0.5% figures for the remaining cities come from a comparison table that accompanies the Grand Rapids rates. Confirm each rate with the city before you file, because an older comparison table may not match the current ordinance.
| City | Resident rate | Nonresident rate | Corporate rate |
|---|---|---|---|
| Detroit | 2.4% | 1.2% | 2.0% |
| Highland Park | 2% | 1% | Confirm with city |
| Grand Rapids | 1.5% | 0.75% | Confirm with city |
| Saginaw | 1.5% | 0.75% | 1.5% |
| The other 20 cities listed above | 1% | 0.5% | Confirm with city |
Corporate rates are the figure most likely to differ from one city to the next. Detroit and Saginaw are the only two cities in this guide where we could verify a corporate rate. For the others, ask the city directly.
What Businesses Owe
The city obligation depends on how the business is organized. Treat the following as a starting point, not a final answer.
Sole Proprietors and Partnerships
Sole proprietors and general partnerships file an assumed name certificate with the county clerk, not with LARA. That filing does not register the business for city income tax. The owner's share of business income is generally reported on the owner's individual city return, at the resident or nonresident rate that applies to the owner.
LLCs
A Michigan LLC is formed by filing Articles of Organization (Form CSCL/CD-700) with LARA through the MiBusiness Registry. That state filing does not register the LLC with any city. A standard LLC is a pass-through entity, so its members generally report their share of income on the state and, where applicable, city returns. An LLC that elects federal C corporation treatment is subject to the 6% Michigan Corporate Income Tax at the state level, and it may owe the city corporate rate where the city levies one. Ask a CPA how your election affects city filing.
Corporations
Corporations file the city corporate income tax return in each city that levies one and where the corporation has taxable business income. Detroit's corporate rate is 2.0%, and Saginaw's is 1.5%. For the other cities, confirm the corporate rate and the filing method directly with the city. The state Annual Report (Form CSCL/CD-2500, due May 15) is a separate obligation and does not satisfy any city return.
Employers and Withholding
If employees live or work in one of the 24 cities, you generally must withhold city income tax from their wages and remit it on the city's schedule. Register with the city's tax office before your first payroll that includes those employees. Tax you were required to withhold and did not can end up owed by the business, so set up city withholding in payroll from the start.
Detroit and the Cities That Run Their Own Tax
The Michigan Department of Treasury administers Detroit's income tax, so Detroit filers deal with the state rather than a city office. The other 23 cities run their own filing and payment. If your business has employees or income in more than one city, you will have separate registrations, rates and deadlines to track. Check each city's tax page, or call its income tax office, before the first filing.
Steps to Take Now
- Identify every city where you have a location, where each owner lives, and where each employee lives and works.
- Check the current rate, filing calendar and forms on each city's income tax page.
- Register with each applicable city, or with Treasury for Detroit, before you pay wages or file.
- Set up city withholding in your payroll system for any employee covered by a city tax.
- Keep income and payroll records by location so you can support each city return.
- Have a CPA review your entity election and any multi-city issues once a year.
State Obligations That Still Apply
Michigan has no general statewide business license. LARA's Corporations Division receives and files the documents that form and maintain business entities, and it does not license businesses. Registering an LLC or corporation through the MiBusiness Registry is a filing, not a license. Trade and activity licenses come from agencies such as the LARA Bureau of Professional Licensing, MDARD and the Michigan Liquor Control Commission, depending on what you do. Local zoning, certificates of occupancy and health approvals may also apply.
Retailers register with Treasury for a sales tax license, which is free. The LLC Annual Statement carries a $25 fee and is due February 15 each year, beginning the year after formation. Corporations file the Annual Report with a $25 fee. Current state guidance is on the Michigan Department of Treasury website and the LARA Corporations Division page.
Where to Confirm Your City's Rate
Start with the city's own income tax office, since it controls current rates and filing rules. For Detroit, use the Michigan Department of Treasury. If you need help working through a multi-city payroll or an entity election, the free Michigan Small Business Development Center can point you to resources. A CPA or attorney should review anything that involves a tax election, a dispute or a filing you are unsure about.
Disclaimer: This guide is informational and is not legal or tax advice. Rates, thresholds and deadlines can change. Verify every figure with the relevant city or state agency and consult a qualified professional before you file.