Michigan Car Sales Tax Calculator

What you pay in tax when you buy a vehicle in Michigan, from the statute and the revenue department.

Verified September 21, 2026 · statute and revenue department cross-checked

Vehicle price (USD) Trade-in value (USD) — capped at $12,000 in 2026

Buying the car is only half the cost. You still owe an annual registration fee.

See Michigan vehicle registration fees →

What to know about Michigan

The trade-in credit is capped. In 2026 the most you can deduct is $12,000 even if your trade is worth far more, so a $20,000 trade only shaves $12,000 off the taxable amount. The cap rises $1,000 every January and disappears entirely in 2029. Private sales get no trade-in credit at all, and manufacturer rebates are taxable.

Sources

Statute: MCL 205.52, MCL 205.51

Michigan Form 485 (Rev. 1-26), Instructions for Vehicle Dealers
“Michigan trade-in allowances for calendar year 2026 are as follows: Motor Vehicles: $12,000 or the agreed-upon value of a motor vehicle (whichever is less).”

MCL 205.51
“Beginning January 1, 2020 and each January 1 thereafter, the amount under sub-subparagraph (C)(I) is increased by an additional $1,000.00 each year.”

Last verified: September 21, 2026.

Estimates only. Your dealer or the state issues the final bill, and exemptions can change what you owe. This page does not collect or store anything you enter.