Who collects Michigan sales tax on dropshipped orders?

You do, as the retailer. Your dropshipper invoices you at wholesale; you invoice the customer at retail. Collection duty follows the retail transaction — that's you.

Will my dropshipper charge me Michigan sales tax on the wholesale?

Only if your dropshipper has Michigan nexus AND you can't provide a valid MI resale certificate. Obtain resale certificates for every state where your dropshipper operates.

Does dropshipping trigger economic nexus in Michigan?

Yes, your retail revenue into Michigan still counts toward the $100,000 in gross sales OR 200 transactions threshold, independent of how fulfillment happens.

Michigan Sales Tax for Dropshipping Sellers — 2026 Guide

Updated 2026-04-27

If your Dropshipping business sells $100,000 or 200 transactions into Michigan in a calendar year, you have economic nexus and must register, collect, and remit Michigan sales tax.

Dropshipping sales tax in Michigan

Dropshipping into Michigan raises three distinct tax questions. First, you (the retailer) have to collect and remit Michigan sales tax on your retail sales if you exceed $100,000 or 200 transactions. Second, your dropship supplier may charge YOU sales tax on the wholesale invoice if they have Michigan nexus and you can't present a valid resale certificate. Third, the marketplace (if any) handles its own tax on facilitated transactions.

Michigan applies 6.00% as the base state rate; no local add-ons apply.

Resale certificate rules

If you have a Michigan sales tax permit, you can usually issue your dropshipper a MI resale certificate to avoid being charged sales tax on the wholesale invoice.
Some states (notably California, Florida, Massachusetts, Tennessee, and a few others) require the buyer to hold an IN-STATE registration before issuing a resale certificate — a home-state certificate isn't enough.
Streamlined Sales Tax (SST) states accept the uniform Multistate Certificate; others have their own forms.

Common dropshipping mistakes in Michigan

Treating your dropshipper's nexus as if it obligates them to collect from the end customer — no, they invoice you at wholesale; you invoice the customer at retail. Only the retail transaction is subject to collection duty.
Forgetting that your retail revenue into Michigan still counts toward the economic nexus threshold, independent of the dropshipping arrangement.
Not keeping resale certificates on file — your supplier will charge you tax (and you'll have already collected from the customer), eroding margin.

Michigan nexus note

Economic nexus in Michigan triggers when remote sellers exceed $100,000 in gross sales OR 200 or more separate transactions into Michigan in the current or preceding calendar year — whichever is met first.

What to do next

Read the full Michigan overview for thresholds, filing frequency, marketplace facilitator rules, and registration links. Use the nexus calculator to check whether you have crossed the threshold. For background on the post-Wayfair economic nexus framework, see the pillar guide.

Frequently asked questions

Who collects Michigan sales tax on dropshipped orders?: You do, as the retailer. Your dropshipper invoices you at wholesale; you invoice the customer at retail. Collection duty follows the retail transaction — that's you.
Will my dropshipper charge me Michigan sales tax on the wholesale?: Only if your dropshipper has Michigan nexus AND you can't provide a valid MI resale certificate. Obtain resale certificates for every state where your dropshipper operates.
Does dropshipping trigger economic nexus in Michigan?: Yes, your retail revenue into Michigan still counts toward the $100,000 in gross sales OR 200 transactions threshold, independent of how fulfillment happens.