Michigan Short Term Rental Tax: The Complete 2026 Guide

Michigan short term rental tax rules surprise a lot of new hosts. There is no separate "state lodging tax" line on the books, yet every short term rental in Michigan owes the 6% state use tax on accommodations, and depending on the county a local excise tax stacks on top. Add income tax on rental income, county tourism assessments, and city zoning rules that decide whether you can operate at all, and the Great Lakes State starts to look complicated.

This guide covers every tax that applies to short term rentals in Michigan in 2026: the 6% state use tax and the statute behind it, county accommodations taxes under the Accommodations Tax Act, the convention facility development tax, what Airbnb and Vrbo collect for you, how to register with the Michigan Department of Treasury and file, and how local regulations in cities like Detroit, Grand Rapids, and Traverse City interact with your tax liability.

Does Michigan Have a Short Term Rental Tax?

Yes — it is just not called one. Michigan taxes short term rentals through the Use Tax Act, MCL 205.93a, which applies a 6% state use tax to "rooms or lodging furnished by hotelkeepers, motel operators, and other persons furnishing accommodations that are available to the public on the basis of a commercial and business enterprise." A whole-house Airbnb in Grand Rapids, a lakefront cottage on Lake Michigan, and a downtown apartment rented by the night are all treated the same as a hotel room for this purpose.

Two rules define whether a stay is taxable. First, the accommodations must be available to the public as a business. Second, the stay must be short: rentals of less than 30 continuous days are subject to the 6% use tax, while a guest who stays 30 days or more in a row is exempt, much like a standard residential lease. So a mid-term corporate tenant on a 60-day booking generates no use tax; the same property rented for weekend reservations does.

What the 6% Applies To

The tax base is the total charge for the accommodations, not just the nightly rent. Cleaning fees, pet fees, extra-guest fees, and similar mandatory charges that a guest must pay to occupy the property are generally part of the taxable room charge. Refundable damage deposits are not, as long as they are genuinely refundable. If you are unsure how a particular fee should be treated, ask a tax professional rather than guessing — misclassifying a fee is the most common way Michigan hosts understate what they collect.

County Accommodations Tax: The Local Layer

Above the state use tax, Michigan lets local government add its own excise tax on lodging. The Accommodations Tax Act (1974 PA 263, MCL 141.861 et seq., amended by 2024 PA 35) permits qualifying counties — those under 600,000 residents with a city of at least 40,000 — to levy an excise tax on persons providing rooms to transient guests. The statutory ceiling is 8% of the total charge for accommodations, and increases beyond the original rate require a vote of the electors. Most counties that levy the tax sit well below the cap, commonly in the 2% to 5% range, and revenue is earmarked for tourism promotion and convention facilities.

Whether a small short term rental is captured depends on the local ordinance. Some ordinances reach any operator renting to transient guests; others exempt facilities under a set number of rooms, which leaves a typical single-dwelling rental outside the tax. Because the rate, the exemptions, and the filing calendar are all set at the county level, you have to read the actual ordinance for the county where the property sits. Two properties an hour apart can face completely different local requirements.

Convention Facility Development Tax

A second local-flavored state tax exists under the State Convention Facility Development Act (1985 PA 106, MCL 207.621 et seq.). It applies to "convention hotels" in certain counties at rates from 1.5% to 6% of the room charge, scaled by room count — the brackets start at 81 rooms. A residential short term rental does not come close to that threshold, so this tax is a hotel issue, not a host issue. The same logic applies to convention and tourism marketing assessments under MCL 141.1351 et seq., which are opt-in assessments of up to 2% collected from lodging facilities with roughly 35 or more rooms in a bureau's region.

Tax Rates in Michigan's Main Short Term Rental Markets

The practical tax stack in the state's biggest markets is simpler than the statute list suggests:

• Detroit: 6% state use tax. The city imposes no separate accommodations or transient occupancy tax on short term rentals; the Wayne County tourism assessment targets larger hotels. Detroit's own cost is on the regulatory side, including its rental program registration fee.
• Grand Rapids: 6% state use tax, plus the Kent County lodging excise tax where the county ordinance applies. Verify with the county treasurer whether your property type and size are within the ordinance.
• Traverse City: 6% state use tax, plus the Grand Traverse County accommodations tax. Traverse City is also one of the most actively regulated short term rental markets in Michigan, with tight zoning limits on non-owner-occupied vacation rentals in residential neighborhoods.
• Ann Arbor: 6% state use tax, plus the Washtenaw County accommodations tax. University demand keeps rates high, and the city restricts short term rentals in most residential zones.

Always confirm the current local rate before you set pricing. A 5% county tax you forgot to collect comes out of your margin, not the guest's wallet.

What Airbnb and Vrbo Collect Automatically

Under Michigan's marketplace facilitator rules, Airbnb and Vrbo collect and remit the 6% state use tax on bookings made through their platforms. That covers most hosts' volume, but it does not end your obligations:

• Direct bookings are yours. Reservations from your own website, repeat guests, or corporate clients are not platform bookings. You must register, collect, and remit the use tax on that revenue yourself.
• Local taxes are often not collected. Platform coverage of county accommodations taxes in Michigan is inconsistent. Pull your platform tax report and check line by line rather than assuming the platform handles everything.
• You still owe income tax. Nothing a platform collects touches your income tax return.

How to Register and File

To collect and remit yourself, register with the Michigan Department of Treasury for a Sales, Use and Withholding (SUW) account using Form 518, then file through Michigan Treasury Online. You will report accommodations receipts and use tax on the monthly or quarterly return (Form 5080) and reconcile on the annual return (Form 5081). Treasury assigns your filing frequency based on expected liability; most single-property hosts qualify for quarterly filing, and larger operators file monthly.

Keep a per-reservation record showing gross rent, each fee, tax collected, guest length of stay, and which platform processed the booking. If Treasury asks how you arrived at a number, that report is the answer. Late filing carries penalties and interest even when the underlying tax was collected by a platform, so file zero returns rather than skipping a period.

Income Tax on Rental Income

Short term rental income is business or rental income on your federal return and flows through to Michigan's 4.25% individual income tax. Some Michigan cities also levy a local income tax that can reach your rental income. Depreciation, platform fees, cleaning, supplies, insurance, mortgage interest, and management fees are deductible, and hosts who materially participate may be able to use rental losses against other income — a meaningful advantage worth reviewing with a CPA before year end. Our guides to the short term rental tax loophole and material participation rules explain how that works.

Local Regulations Still Decide Whether You Can Operate

Michigan has repeatedly attempted, and so far failed, to pass statewide legislation that would preempt cities' power to regulate short term rentals. Until that changes, zoning stays local. Some communities require registration and an annual fee, some cap the number of vacation rentals per neighborhood, and a few effectively prohibit non-owner-occupied listings outside commercial zones. New regulations appear every year, so hosts should stay informed on council agendas in their municipality. Paying your taxes perfectly does not make an unpermitted listing legal. See our full breakdown of Michigan short term rental laws for city-by-city permit and zoning rules.

Common Mistakes Michigan Hosts Make

• Assuming there is no Michigan short term rental tax because there is no "lodging tax" by that name.
• Letting platform collection cover direct bookings, which it never does.
• Excluding cleaning fees from the taxable room charge.
• Treating a county accommodations tax as optional because the platform did not collect it.
• Missing the 30-day exemption and over-collecting from long-stay guests.

Frequently Asked Questions

Does Michigan have a state lodging tax on short term rentals?

Not under that name. Michigan applies its 6% state use tax to accommodations rented for fewer than 30 continuous days under MCL 205.93a, which functions as the state lodging tax.

Does Airbnb collect Michigan use tax automatically?

Yes. Airbnb and Vrbo collect and remit the 6% state use tax on platform bookings. Hosts taking direct bookings must register with Treasury and remit it themselves.

Are stays of 30 days or more taxable in Michigan?

No. Continuous rentals of 30 days or longer are exempt from the use tax on accommodations, similar to a residential lease.

How much is the county accommodations tax in Michigan?

It varies by county and is capped at 8% of the total charge under the Accommodations Tax Act. Many counties levy 2% to 5%, and some ordinances exempt small properties entirely.

Which form do Michigan short term rental hosts file?

Register with Form 518, then file Form 5080 monthly or quarterly and Form 5081 annually through Michigan Treasury Online.

What are the penalties for not collecting Michigan use tax?

Treasury can assess the unpaid tax plus penalties and interest, and unregistered operators can be assessed for prior periods. Registering voluntarily before an audit is far cheaper than being found.

Getting Michigan Short Term Rental Tax Right

Michigan's system rewards hosts who do three things: register for a use tax account even if a platform collects most of your tax, read your county's ordinance instead of assuming the state rate is the whole story, and keep reservation-level records that reconcile to your returns. Do that and compliance costs you an hour a quarter. Skip it and you are relying on a platform report to survive an audit.

If you would rather not manage tax registration, filings, and shifting local rules yourself, our team handles compliance alongside pricing and operations for owners across our markets — talk to us about managing your property.