Overview
Michigan also runs one of the broadest family-transfer exemptions in the country - spouse, parent, child, sibling, step- and half-relations, grandparents, and a long list of in-laws all skip the 6% entirely, whether the car is a gift or a paid sale between them. Pick your scenario below and the calculator applies the right Michigan rule.
01 - Official fees
Michigan car sales tax fees at a glance
| Fee | Amount | Notes |
|---|---|---|
| Standard rate | 6% | dealer and private-party sales |
| Dealer trade-in credit (2026) | up to $12,000 | of the traded vehicle's value comes off the taxable price |
| Family transfer | 0% | spouse, parent, child, sibling, stepparent/stepchild, stepsibling, half-sibling, grandparent/grandchild, father/mother/son/daughter/brother/sister-in-law, grandparent-in-law, or legal ward/guardian |
| RV trade-in credit | Unlimited | recreational vehicles get full credit, no cap |
| Fraudulent exemption claim | Up to 175% of tax owed | penalty if Treasury can't verify the relationship |
Figures verified June 2026 against official sources (listed below). Always confirm the final amount with the Michigan Secretary of State (branch office or SOS2GO/Online Services) - counties can add small local fees.
03 - Same state, other costs
More Michigan vehicle costs
04 - Common questions
Michigan car sales tax FAQ
How much sales tax will I pay on a $25,000 car with a $10,000 trade-in in Michigan?
6% of $15,000 = $900. Since the 2026 trade-in cap is $12,000, a $10,000 trade-in comes off in full. If the trade-in were worth $15,000, only $12,000 of it would count, so you'd still be taxed on $13,000.
When does Michigan's trade-in credit stop being capped?
The cap has climbed $1,000 every January since a 2013 law began the phase-in: $11,000 in 2025, $12,000 in 2026, scheduled for $13,000 in 2027 and $14,000 in 2028. Once it exceeds $14,000, the credit becomes unlimited - full trade-in value, tax-free - starting in 2029.
Does the trade-in credit apply to a private-party sale?
No - the credit is specific to trading a vehicle in to a licensed dealer as part of buying another one. If you sell your old car privately and buy a different one privately, there's no trade-in mechanic; each transaction is taxed on its own.
Who counts as 'family' for Michigan's tax exemption?
A long list: spouse, parent, child, sibling, stepparent/stepchild, stepsibling, half-sibling, grandparent/grandchild, and in-laws (mother, father, son, daughter, brother, sister), plus a grandparent-in-law or a legal ward/guardian relationship. It covers sales as well as gifts - a paid sale between qualifying relatives is just as tax-exempt as a gift.
Do I need paperwork to prove the family relationship?
Not at the SOS counter - you just mark the relationship on Form RD-108 when titling. But the Michigan Department of Treasury can later ask you to document it, and falsely claiming the exemption risks a penalty of up to 175% of the tax that should have been paid, plus possible criminal referral.
Is there a cap on trade-in credit for RVs?
No - recreational vehicles get an unlimited trade-in credit under Michigan Department of State guidance, unlike the capped schedule that applies to cars, trucks, and motorcycles.
05 - Receipts
Official sources
Every number on this page comes from these documents - check them yourself.