Michigan business license: what you need and how to get it

Do you need a business license in Michigan?

Michigan doesn’t issue a general business license, but many businesses still need at least one license or registration. That’s most often the sales tax license plus any occupational license from the Michigan Department of Licensing and Regulatory Affairs (LARA) and any city license where you operate. 

One clarification that’s important to understand: Forming a business entity like an LLC doesn’t give your business a license. There’s no separate Michigan small business license, since the state doesn’t issue a generic business license.

In Michigan, what you’re looking at is:

• State registration of the business
• Trade-specific licenses
• Local requirements

Nav’s business licensing by state guide lays out requirements for various states. Some businesses must be licensed in multiple states. For example, a Michigan business may also operate and be required to get a license in a neighboring state like Ohio, Indiana, or Wisconsin. 

What is the Michigan sales tax license?

Anyone who sells tangible personal property (goods you can hold or exchange) to the final customer needs a sales tax license from the Michigan Department of Treasury. If you’re based outside Michigan, you may still owe sales or use tax on Michigan sales.

Here’s what to know:

• It’s free to apply
• You can register online through Michigan Treasury Online (MTO) or mail Form 518. Online registrations are authenticated within 10—15 minutes, while mailed forms take four to six weeks
• Treasury issues the license yearly, and it’s valid January through December
• You can print your license from MTO once Treasury processes your application

You don’t have to wait for the license to arrive before you start selling, but you do have to remit sales tax from your first sale. 

One more thing that makes Michigan simpler than many states is that sales tax is a flat 6%, and cities and counties can’t add their own sales tax rate. 

How to get a business license in Michigan in 5 steps

1. Form your business or file an assumed name. If you’re forming an LLC or corporation, you can register at the MiBusiness Registry Portal. If you’re a sole proprietor using a name other than your own, file a doing business as (DBA) certificate with the county clerk where your business is located, and know that it only covers that county. 
2. Get an employer identification number (EIN). An EIN is free from the IRS, so be careful with sites that charge for one. You need one if you have employees or operate as a corporation or partnership, while a sole proprietor without employees may use a Social Security number instead. Here’s how to get an EIN. 
3. Register with the state for taxes. Use Michigan Treasury Online to register for sales tax, use tax, and withholding, depending on what applies to you. If you’re hiring, you also register for unemployment tax through the Unemployment Insurance Agency. (A new online system will debut November 9, 2026.) 
4. Apply for occupational license, if required. Check LARA’s State License Search to see whether your trade is regulated. Professional licenses, like cosmetology and barbering, go through LARA’s MiPLUS system. Trades like electricians and residential builders apply through the Bureau of Construction Code’s portal. 
5. Check your city or township. Contact the clerk where you operate about local licenses, zoning, building codes, and home-based business rules. Check into requirements before you sign a lease or buy equipment.

Remember, forming an LLC or incorporating is not the same as getting a business license or permit. 

How much is a business license in Michigan?

Here's how much a business license costs in Michigan and what the Michigan small business license cost looks like once you add formation and trade specific fees.

Do you need a city or county business license in Michigan?

Cities in Michigan typically license specific activities rather than every business. 

Let’s take Detroit as an example. Some, but not all, business types need a license from the city’s Buildings, Safety Engineering, and Environmental Department (BSEED) and you can look up requirements online at BSEED. The city also dropped 34 small business license types in 2021. 

Grand Rapids licenses certain activities, such as food trucks, lodging, vendors, and businesses run out of a home. Ann Arbor does the same for activities including solicitors and peddlers, and short-term rentals.

Cities, townships, and villages set zoning and building rules, and may require home occupation permits for home-based businesses.

Which Michigan occupations need a state license?

Many regulated trades are licensed through LARA. Here are some popular ones:

If you are  going into the building trades, plan ahead. Residential builders and maintenance and alteration contractors need to complete a 60-hour pre-licensure course from an approved provider. (The Bureau of Construction Codes also lets potential customers verify licenses through its portal before hiring someone.)

How licensing helps with financing and business credit

Banks may ask for your EIN, formation documents and business license when you open a business bank account. Some lenders, landlords, and suppliers may require proof of registration and licensing, too. A registered business with its own EIN, business bank account, and supplier accounts is the foundation for establishing business credit.

Nav is not a lender or a credit bureau. Credit information is provided by third-party sources.

The bottom line

Michigan has no general business license, so what you need depends on what you sell, where you operate, and whether your trade is regulated. If you sell goods, you need a sales tax license. Regulated trades may need a professional license. Cities and townships may have additional requirements. 

Once you've started your business, explore business loans and see how Nav Prime can help you keep building toward funding.

Frequently asked questions