Do you own a business operating in the state of Michigan? If so, you may need to acquire licenses and permits to ensure that your company operates in a compliant fashion.
But how do you determine which permits and licenses you need (if any), and where do you acquire them? In this guide to Michigan business licenses and permits, we’ll answer all the tough questions about this process.
Are There Federal Licenses That My Business Needs?
First off, let’s discuss the matter of federal licenses and permits. There are many business activities that are regulated by various federal agencies, from agriculture to transportation and logistics. We recommend taking a look at the U.S. Small Business Administration’s guide to federal licenses and permits to make sure you’ve got your bases covered.
In addition, most businesses should acquire a federal tax ID number, also known as an EIN (employer identification number). This is essentially a social security number for your business, and it enables you to hire employees, pay business taxes, open business bank accounts, and more. You can acquire an EIN from the IRS for free.
What State-Level Licenses and Permits Apply in Michigan?
According to the SBDC’s Guide to Starting and Operating a Small Business, “not every business in Michigan is required to be licensed by the State of Michigan. Licenses are required for certain vocations or occupations that may be conducted within a business, and local governments may also require business licenses.”
If you are unsure which state licenses your business is required to obtain, you can find licenses by keyword using the Michigan State License Search. There are various licensing requirements for specific industries in Michigan, from cosmetology to commercial construction.
You may also be required to obtain professional licensing, depending on your occupation. You can learn more about these requirements on the Bureau of Professional Licensing website.
The Department of Environment, Great Lakes, and Energy also administers permits for certain commercial activities that impact soil, water, or air quality. Check out this link to learn more about Michigan’s environmental regulations and consult the DEQ Checklist to determine if your business requires an environmental permit.
Which Tax Registrations are Required for Michigan Businesses?
In addition to occupational licenses and permits, there are a number of state-level tax registrations, which are based on the industry you operate in and which business structure your company uses.
Since 2007, businesses in Michigan have been required to pay the Michigan Business Tax (MBT). The MBT serves as a tax on business income at a rate of 4.95% and gross receipts at a rate of 0.8%. Corporations are also required to pay Corporate Income Tax, and most business are required to pay Withholding Tax and Sales and Use Tax.
Depending on the nature of your business, you may need to register and pay one or more industry-specific taxes. These can range from the Severance Tax on oil and gas production to taxes on businesses that sell tobacco products. No matter what kind of business you own, you can use the Michigan Department of Treasury website to determine which (if any) industry-specific taxes your business will need to pay.
Are There Local Licenses, Permits, or Registrations in Michigan?
The answer to this question obviously depends on where in Michigan you’re operating your business, but there are indeed quite a few licenses, permits, and tax registrations required by Michigan localities.
While many Michigan business licenses are administered at the state level, you will need to check with the proper authorities in your county or city to determine if your business requires any local licenses. In Michigan, this will typically mean contacting the county or city clerks. You can find the clerk for your city on the Michigan Association of Municipal Clerks website. There is also a directory for county clerks right here.
Additionally, many cities in Michigan offer business resource websites where you can learn about the local licensing requirements, including cities like Detroit, Grand Rapids, Warren, and Sterling Heights.
If we were to break down the exact rules and regulations regarding permitting in every locality in the state of Michigan, this article would become excessively lengthy. With that in mind, we’ll simply say that every business owner should check with their local government to determine whether there are licenses, permits, or tax registrations required to operate in compliant fashion.
Can I Hire Someone to Research Licenses and Permits for My Business?
If this process sounds like a bit of a hassle, that’s because it certainly can be. If you would rather hire a reputable business services provider to handle this for you, that is always an option.
Companies like Incfile can research the necessary licenses and permits for your company on the federal, state, county, and municipal levels. They will then send you the applications you need to acquire these permits and licenses, meaning all you need to do is fill them out and mail them in.
There is no one-size-fits-all answer for the question of which licenses and permits your business might require to operate in the state of Michigan. Instead, it’s important that you know how to access the resources to determine which permits your company needs to operate in a compliant fashion.
We hope this article helped you to do just that, and we wish you good fortune in your business future!