Michigan Vacation Rental Tax Calculator

Estimate your property tax, lodging tax, federal & state income tax, and depreciation deductions for your Michigan vacation rental property.

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Tax Types

What Taxes Apply to Michigan Short-Term Rentals?

Michigan STR hosts are subject to several types of taxes. Understanding which ones apply — and who collects them — is the first step toward compliance.

Sales Tax

Michigan applies its state sales tax to short-term rental stays — currently at a base rate that contributes to combined lodging rates of 11%. Cities may add local sales tax on top.

Occupancy / Transient Lodging Tax

Michigan's lodging/occupancy tax is the primary STR-specific tax. Combined rates reach 11% in Detroit and 11% in Traverse City. This includes state, county, and city-level components.

Tourism / Convention Center Tax

Some Michigan cities levy additional tourism, convention center, or special district taxes that add 1–3% to your total rate. In Detroit, the combined rate of 11% already includes these surcharges.

Federal & State Income Tax

Net rental profit is subject to both federal income tax (10–37% in 2026) and Michigan's state income tax at 4.25%. Reported on Schedule E (Form 1040). Deduct expenses like mortgage interest, repairs, and depreciation.

Property Tax

Michigan's average effective property tax rate is 1.54% — among the highest in the U.S.. Assessed annually on market value. STRs may face higher assessments in some jurisdictions.

Important

Does Airbnb Collect and Remit Taxes in Michigan?

Airbnb has agreements to collect and remit taxes in Michigan — but coverage is not always complete.

Airbnb collects Michigan's state-level lodging tax in most jurisdictions.
In Detroit and Traverse City: Airbnb may or may not collect all county/city taxes.
Rural areas: You're often fully responsible for all local tax collection.
Even where Airbnb collects, you may owe additional local levies or special district taxes.

Bottom line: Never assume Airbnb handles all your Michigan tax obligations. Verify with your local tax authority.

Compliance

Do You Need a Tax Permit in Michigan?

In most Michigan jurisdictions, yes. Common permits and registrations required:

State sales tax permit / seller's permit
City or county business license
Short-term rental operating permit
Lodging tax registration certificate

Consequences of non-compliance

5–25% penalties on unpaid taxes in Michigan

Revocation of rental permit

Liens on your property

Tax Overview

Short-Term Rental Taxes in Michigan

Key tax facts every vacation rental host in Michigan should know.

State use tax: 6% (applies to lodging)

Local convention/tourism taxes: 2–5%

State income tax: 4.25%

Property tax rate: ~1.54%

City Breakdown

Lodging Tax Rates by City in Michigan

Combined lodging/occupancy tax rates for major vacation rental markets in Michigan.

CityCombined Rate

Detroit

6% state + 5% county convention

11%

Traverse City

6% state + 5% local

11%

Ann Arbor

6% state + 4% local

10%

Rates are estimates based on 2024-2025 data. Always verify with your local tax authority.

FAQs About Michigan Vacation Rental Taxes

Common questions about short-term rental taxes, permits, and compliance in Michigan.

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