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Robin D.
Robin D., Senior Tax Advisor 4
Category: Tax
Satisfied Customers: 15443
Experience:  15years with H & R Block. Divisional leader, Instructor
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I have rented my house in Michigan in 2008 as I couldnt sell

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I have rented my house in Michigan in 2008 as I couldnt sell it. I moved to South Dakota. I have been reading recently and I found out that I have to pay sales tax to the state of Michigan on the rent I receive? I need help with this matter
Submitted: 7 years ago.
Category: Tax
Expert:  NYCLAWYER replied 7 years ago.
What specifically do you want to know and accomplish?
Customer: replied 7 years ago.

WHat do you mean know and accomplish? I have already asked my question, do I need to pay for sales tax for the rent I receive from my tenant in Michigan?

they pay me 1675 for rent monthly, do I need to pay the state of michigan any sales tax? I already pay the property taxes which has increased as my property is registered in the city as rental

Expert:  NYCLAWYER replied 7 years ago.
i am going to send this to our tax experts.
Expert:  Robin D. replied 7 years ago.

HelloCustomer

Thank you for using Just Answer.

I was reading your question and wondered what you read about Michigan tax on rental property that led you to believe you were liable for the tax on th property?

Michigan does have a tax on rental but it involves the tax on hotel and motel rooms. It appears from your question that you are renting your prior home on a long term basis and not nightly.

If I am incorrect in assuming the use of the rental property please let me know and the article or paper you read that informed you of th tax obligation.

Thank you in advance,

Customer: replied 7 years ago.
Thanks for your reply.
Yes its a long term rental. I read this while trying to file for my taxes. As a source of income they wanted to calculate the lease after I deduct the sales tax. I guess its not an accurate information.
Expert:  Robin D. replied 7 years ago.

Hello again,

No you need only report the rental income to Michigan as a Non Resident now since you have moved to South Dakota.

Michigan law does not make any provision for granting a partial exemption based on the

percentage of the year that the homeowner occupied the home as a principal residence. Federal law allows a homeowner to rent their principal residence for less than 15 days during a calendar year without declaring it as a rental property on their tax return. A homeowner that would be required to declare rental income on their home is

not entitled to a homeowner's principal residence exemption on that property. Therefore, if a homeowner rent's his property for more than 14 days a year, the property is not entitled to a HPRE.

The exemption will remain in place until December 31st of the year that the use was changed from your principal residence to a rental property.

I hope this additional information is useful but please be aware you need only show the rental income on Federal and state but there is not an additional tax due as it is long term rental.

Robin D., Senior Tax Advisor 4
Category: Tax
Satisfied Customers: 15443
Experience: 15years with H & R Block. Divisional leader, Instructor
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