Do You Pay Sales Tax on a Roof Repair in Michigan?

Michigan has two companion taxes. The General Sales Tax Act, at MCL 205.52, levies a tax equal to 6 percent of the gross proceeds of anyone in the business of making retail sales of tangible personal property. The Use Tax Act, at MCL 205.93, levies a tax at the same 6 percent rate on the privilege of using, storing or consuming tangible personal property in Michigan. Between them, a piece of property used in Michigan is meant to be taxed once, either when it is sold at retail or when it is used.

Treasury's sales and use tax page adds two facts that simplify a homeowner's math. Michigan does not allow cities or other local units to impose a sales tax or a use tax, so the rate is the same 6 percent in Grand Rapids, Holland, Kalamazoo or a rural township. And the tax is aimed at tangible personal property, which is why the question for a roof repair is really about the materials, not the work.

Treasury answers the question directly in its Construction FAQ. A contractor in the business of constructing, altering, repairing or improving real estate is considered the consumer of the materials, and "contractors would not charge sales tax to their customers." The FAQ goes on: "There is nothing to preclude a contractor from billing a customer for all costs involved in the contract, including the tax. However, the contractor may not break out the tax as though tax was being billed to their customer. The tax is merely a cost of doing business."

RAB 2025-18 says the same thing in its conclusions: a contractor that pays sales or use tax on the property it uses in performing a construction contract "may not charge sales or use tax directly to its customer," but "may include the amount of the tax in the total contract price as an overhead cost." So the normal Michigan roof repair invoice or estimate has no sales tax line at all, and that is the correct result, not a sign that tax was dodged.

Because the tax is on materials, its share of a repair price is smaller than many people expect. Roof repairs are labor heavy: access, tear-out, careful flashing work and cleanup take more of the bill than a bundle of shingles or a few pieces of metal. Take a purely hypothetical repair where the contractor buys $400 of materials. The 6 percent tax on those materials is $24, and that $24 is the tax component inside whatever the final price is, however the rest of the job is priced.

That has two practical consequences. First, sales tax is rarely the reason two repair quotes differ; the scope, the materials specified and the warranty are. Second, a promise to "save you the sales tax" on a roof repair is not much of a promise, because there is no separate tax on the job for a contractor to waive. Compare the work, not the tax treatment.

Michigan gives contractors an exemption for materials affixed to only a handful of kinds of property. Treasury's Construction FAQ lists them: the real estate of a qualified nonprofit hospital, private nonprofit housing that holds an exemption certificate under the State Housing Development Authority Act, a church sanctuary, and an air or water pollution control facility certified by the State Tax Commission. RAB 2025-18 adds narrower categories, such as qualified data centers, certain tribal property, enterprise zone activities and property affixed to real estate outside Michigan.

For church roofs, MCL 205.54p and MCL 205.94m exempt materials affixed to or made a structural part of a sanctuary, meaning the part of a building owned and occupied by a 501(c)(3) religious organization and used predominantly and regularly for public worship. Treasury's bulletin treats roofs directly over the interior worship area as exempt and roofs beyond it as taxable. For roof material on mixed-use buildings, it allows an apportionment: sanctuary square footage divided by total building square footage, applied to the material purchases. Fellowship halls, offices, classrooms and gyms are not exempt.

To use any of these exemptions, the property owner completes Form 3520, the Contractor Eligibility Statement, and the contractor gives its supplier Form 3372, the Certificate of Exemption, with a copy of the 3520. Tools and supplies that don't become part of the building, such as blades and sandpaper, stay taxable.

For an ordinary home repair, none of this needs action from you. If you are pricing work for a church, a qualified nonprofit hospital or nonprofit housing, raise the exemption before the contractor orders materials, because the paperwork has to reach the supplier. If you see sales tax on a residential estimate, ask how it was calculated. Treasury takes questions through its sales, use and withholding taxes line, and this page is general information, not tax or legal advice, so confirm your situation with Treasury or a tax professional.