Tax Obligations

Here is information regarding Bay City's tax rates and business obligations. For full state requirements, visit the Michigan Department of Treasury.

Single Business Tax

The Single Business Tax is modified value-added tax. A rate of 2.3% is added during the production process. Eligible small businesses may use an alternative 2% tax on adjusted business income.

Workers' Compensation

Michigan employers can choose among a wide variety of rates. The lowest rate is typically one-half the highest rate. The average Michigan firm paid less in 1992 than it did in 1981 for workers' compensation insurance.

Unemployment Insurance

In Michigan, unemployment insurance rates are determined by past experience. A firm with few layoffs pays very low unemployment rates, while a firm with high cyclical employment pays a higher rate. New employers pay a 2.7% rate in the first and second years. For firms with no layoffs, the rate falls to 1.8% and 1% in the third and fourth years, respectively. The minimum rate can drop as low as 0.5% for companies with no layoffs after five years.

Property Taxes

Property taxes in Michigan are determined at the state and local levels. The taxable value of property is 50% of the current market value. Both real and personal property, except inventory, are subject to taxation. For properties located within the City of Bay City, the rate ranges from 47.0501 to 65.0501 mills (ad valorem, real, personal) depending on the location and school district.

Sales Tax

There is no local sales tax in Michigan. The statewide sales tax rate is 6% excluding electricity and natural gas used in production, air and water pollution abatement equipment, and machinery and equipment used in manufacturing.

Income Tax

Michigan has a 4.4% flat personal income tax rate. There is no local income tax in Bay City.