Medical & Dental Practices Bookkeeping in Michigan

Registering to do business in Michigan runs through the Michigan Department of Licensing and Regulatory Affairs, with tax accounts through the Michigan Department of Treasury and employer accounts through the Michigan Unemployment Insurance Agency. Michigan treats these as wholly independent, so being in good standing with one says nothing about the others — and the sales tax account is the one that accrues a real balance while you are not looking.

Beyond sales tax, Michigan entities carry their own obligations — registration with the Michigan Department of Licensing and Regulatory Affairs, and whatever annual entity-level tax or report the state imposes to stay in good standing. No local sales tax, and sales and use tax are reported on a combined return with withholding. Losing good standing is not merely administrative: it can interrupt financing, a sale, or a license renewal at the worst possible moment, which is why these are accrued and calendared rather than discovered.

Whether medical and dental practices services are taxable in Michigan is the question that catches people out — states differ enormously, and several have been broadening what counts. No local sales tax, and sales and use tax are reported on a combined return with withholding. We code service revenue separately from any product revenue so the treatment is explicit rather than assumed.