Michigan has no law that bans or caps credit card surcharges, and the state’s own Attorney General confirms it directly. But Michigan does have an unusually clear position on a related question almost no consumer-facing coverage of this topic answers: is the surcharge itself taxed? The Michigan Department of Treasury has ruled yes, in writing, with a citation chain most “surcharge laws by state” roundups never touch. Alabama, one state over in this series, ruled the opposite way on the identical question a year later.

No General Surcharge Law, Confirmed by the State Itself

The Michigan Attorney General’s Consumer Protection page states it directly: “Although surcharging is now permitted by credit card rules, retailers must continue to abide by state laws that prohibit or restrict credit card surcharges. Michigan does not have any such law.” The same page adds that Michigan “likewise does not have any such law that prohibits or restricts debit card surcharges,” which is narrower than it sounds. Debit surcharging is still off-limits in Michigan, same as everywhere else, but that comes from Visa and Mastercard’s own network rules and the 2013 class-action settlement that first allowed credit card surcharging, not from anything the Michigan legislature wrote.

That leaves merchants bound only by the card networks: signage at the entrance and the register, a surcharge that never exceeds the merchant’s real cost of acceptance, and a hard cap of 3% on Visa and 4% on Mastercard. No dedicated Michigan statute adds anything on top of that.

Michigan’s Real Answer: The Surcharge Gets Taxed

Where Michigan actually takes a firm, citable position is on a question most surcharge-law content skips entirely: once a merchant adds the fee, does sales tax apply to it? The Michigan Department of Treasury answered this directly in its May 2024 Treasury Update newsletter, in an article titled “Card Surcharge Subject to Sales Tax.” The reasoning traces to specific statutory language, not just agency preference: the General Sales Tax Act taxes the “sales price” of a transaction (MCL 205.51(1)(c); MCL 205.52(1)), and “sales price” is defined to include “service cost[s] … and any other expense of the seller” (MCL 205.51(1)(d)(ii)). Treasury’s conclusion: a credit-card surcharge is a “service cost” the seller passes to the buyer, so it is part of the taxable sales price, not a separate, untaxed pass-through fee.

The newsletter spells out the math directly: if a $50 restaurant charge is surcharged into a $51 bill, Michigan taxes the full $51, not the original $50. “Sellers employing credit-card surcharges on purchasers should make sure that they remit tax on the surcharges,” Treasury wrote, putting the compliance burden explicitly on the merchant, but the cost lands on whoever pays the bill.

Alabama Just Ruled the Opposite Way

This is where Michigan’s position becomes genuinely useful to know, because it is not the only answer a state has given. Alabama’s SB 221, effective September 1, 2026, does the reverse: it excludes a credit card transaction fee from the state’s sales and use tax base entirely, as long as the fee appears as a separate, clearly identified line item from the price of the purchase. Charge $100 for the item and $3 as a distinct card fee, and Alabama taxes only the $100. Michigan, on the same fact pattern, taxes the full $103.

Two states, an identical transaction structure, and opposite statutory answers. Neither is a technicality. Alabama had to pass a specific law to carve the fee out of its tax base; Michigan reached its answer by reading its existing General Sales Tax Act’s broad “sales price” definition as already covering it. A shopper crossing from one state to the other pays a different effective total on the exact same $50-plus-surcharge purchase, and the difference is state tax policy, not the merchant’s math.

The Gas Station Wrinkle

Michigan does regulate one specific surcharge scenario by statute: the price sign outside a gas station. Under the Weights and Measures Act, MCL 290.628e, if the price a station advertises on its road sign depends on how you pay, the condition (typically “cash price”) cannot be buried in small print. It has to be posted immediately next to the price, with equal illumination, in lettering at least half the size of the price digits. A station cannot post $3.29 for cash in two-foot lit numerals and squeeze “cash price only” into unlit text a driver can’t read from the road. This rule sits in the state’s weights-and-measures code, not its consumer protection statutes, and no other Michigan business type has a comparable signage requirement.

What to Actually Check

• On the receipt: If you’re surcharged in Michigan, sales tax should be calculated on the total including the surcharge, not just the pre-surcharge price. A receipt taxing only the original amount is arguably under-collecting, not doing you a favor; a receipt taxing the surcharged total is Michigan working as designed.
• At a gas station: The road sign’s cash-versus-card qualifier has to be at least half the height of the price digits and equally lit, under MCL 290.628e.
• Everywhere else: Look for network-required signage at the door and register, and the surcharge broken out as its own line, not folded into the total.
• On any receipt: The surcharge itself can never exceed the merchant’s real cost of acceptance, capped at 3% (Visa) or 4% (Mastercard).
• On a debit card: Never surchargeable, in Michigan or anywhere else, regardless of state law.

Where to Report a Violation

For an undisclosed or improperly structured surcharge, the Michigan Attorney General’s Consumer Protection Team takes complaints, as do Visa and Mastercard directly for network-rule violations. A gas station sign that violates the price-condition rule falls under the Michigan Department of Agriculture and Rural Development’s weights and measures enforcement. A dispute over whether tax was calculated correctly on a surcharged bill is a matter for the Michigan Department of Treasury, not the Attorney General’s office.

The Card Math: Why a Flat-Rate Card Blunts the Hit

If a Michigan merchant surcharges you, and Michigan taxes that surcharge on top, the card in your wallet decides how much of it you get back. A flat 2% cash-back card offsets roughly two-thirds of a 3% Visa surcharge and half of a 4% Mastercard surcharge, a meaningfully better outcome than a card that only earns in bonus categories that don’t happen to include “surcharge plus sales tax on the surcharge.” The Citi Double Cash Card earns a flat 2% on every purchase (1% when you buy, 1% when you pay it off), no annual fee, no category tracking, making it one of the more dependable ways to claw back a cost you can’t avoid at the pump or the register.

Bottom Line

Michigan has no general law banning or capping merchant credit card surcharges, so surcharging there runs on Visa and Mastercard’s network rules alone. What Michigan does have is an explicit, statute-backed ruling that the surcharge itself gets taxed as part of the sales price, the opposite of the answer Alabama gave in 2026. Check your receipt to see whether tax was applied to the surcharged total, check any gas station sign for the required cash-price disclosure, and know that Visa and Mastercard’s 3%/4% caps are the only ceiling on the fee itself.

FAQ

Q: Is it legal for a store to charge a credit card fee in Michigan?
A: Yes. Michigan has no state law banning or capping merchant surcharges. It’s legal as long as the merchant follows Visa or Mastercard’s disclosure and cap rules.

Q: Does Michigan charge sales tax on a credit card surcharge?
A: Yes. The Michigan Department of Treasury ruled in its May 2024 Treasury Update that a surcharge is part of the taxable “sales price” under the General Sales Tax Act (MCL 205.51, MCL 205.52), because it qualifies as a “service cost” the seller passes to the buyer. A $50 purchase surcharged to $51 is taxed on the full $51.

Q: How is that different from Alabama?
A: Alabama’s SB 221, effective September 1, 2026, does the opposite: it excludes a clearly itemized credit card fee from the sales tax base entirely. The same $1 surcharge on a $50 purchase is untaxed in Alabama and taxed in Michigan.

Q: Does Michigan have any surcharge-specific law at all?
A: One narrow one. MCL 290.628e, part of the Weights and Measures Act, requires gas stations advertising a cash-versus-card price to post that condition immediately next to the price, in lettering at least half the size of the price digits and equally lit.

Q: Can I be surcharged on a debit card in Michigan?
A: No. Michigan has no state statute on this specifically, but Visa and Mastercard’s network rules and the 2013 settlement terms that permit credit card surcharging still prohibit surcharging debit or prepaid transactions everywhere, Michigan included.

For how the other 50 states handle this, see our state-by-state credit card surcharge law breakdown.