Michigan used car dealer paperwork and sales tax guide
How Michigan sales tax works on a used-car deal, how trade-ins and dealer fees are treated, and the title forms and notices a Michigan dealer prints.
Last checked November 14, 2026
This is a plain-language summary of how a used-car deal works out in Michigan: the sales tax, what happens to a trade-in, how dealer fees are treated, and the paperwork a dealer prints. DMS Apex uses these same rules to work out each Michigan deal.
Michigan tax and fees at a glance
| Item | Michigan |
|---|---|
| State tax | 6% state rate |
| Who pays it | Collected by the dealer |
| Trade-in | Reduces the tax |
| Documentary preparation fee | Part of the taxable amount |
| Service contract | Not taxed |
| Starting title fee in DMS Apex | $15 |
How Michigan sales tax is worked out
Michigan: the dealer collects 6% on the price, the documentary fee and other charges. The trade-in credit is capped at $12,000 in 2026 ($13,000 in 2027, $14,000 in 2028, no cap from 2029), one trade-in per sale. Optional warranties and GAP are not taxed. On a financed sale the documentary fee is limited to the lesser of 5% of the cash price or $280, and it may not be described as required by Michigan law. Title fee starts at $15.
Michigan paperwork a dealer prints
DMS Apex prints these documents for a Michigan deal, all in black and white:
- Buyer's Order
- Buyers Guide
Step-by-step form guides
- RD-108 Application for Title and Registration / Statement of Vehicle Sale: how to fill it out
This is general information, not legal or tax advice. Michigan rules change: confirm current requirements with the Michigan Secretary of State or the Michigan Department of Treasury.
Common questions
How much is sales tax on a used car in Michigan?
6% state rate. A trade-in reduces the taxable amount. See the table above and confirm the current rate with the Michigan Secretary of State or the Michigan Department of Treasury.
Does a trade-in lower the tax in Michigan?
Yes. In Michigan the trade-in allowance reduces the amount the tax is figured on.
Is the dealer fee taxed in Michigan?
Yes. In DMS Apex the documentary preparation fee is part of the taxable amount for Michigan.
Does DMS Apex print Michigan dealer forms?
Yes. It prints Buyer's Order, Buyers Guide.
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