Hotel / Motel Permits & Licenses in Sterling Heights, MI

Multi‑member LLCs are taxed as partnerships (Form 1065). Single‑member LLCs are disregarded entities (Schedule C).

Required for all LLC formation. Annual statement also required (see separate entry).

Applies to all LLCs; maintains good standing.

File Certificate of Assumed Name; renew every 5 years ($10).

Specific to hotels/motels; full fee schedule at source. Inspections required.

All hotels/motels that employ staff must withhold and remit federal income tax, Social Security, Medicare, and FUTA taxes.

Employers must register with the UIA and pay quarterly unemployment insurance taxes. New employers pay 2.7% on first $9,500 of each employee's wages annually until rate is experience-rated.

By default, LLCs are pass-through entities and do not pay corporate income tax. However, if the LLC has elected corporate tax treatment with the IRS (Form 8832), it must file Form 4832 and pay 6% Michigan Corporate Income Tax.

6% state sales tax applies to all room rentals under 30 days. This is commonly referred to as the 'transient guest tax' in Michigan. Collected by the hotel and remitted via Form 1044. Applies to all hotels, motels, inns, and short-term lodging providers.

Required for hotels as room rentals are taxable; renew if changes occur.

Withholding E-registration System (WREG); hotels typically have staff.

1% of sales price; remitted with sales tax return.

Hotels and motels in Michigan must collect and remit 6% state sales tax on room rentals. This applies to stays of less than 30 days. Registration is required through the Michigan Treasury Online (MTO) system.

Required if the hotel employs staff. Employers must withhold Michigan individual income tax from employee wages and remit monthly or quarterly based on liability.

Key standards include 1910.141 (Sanitation), 1910.106 (Flammable liquids), 1910.120 (Hazardous waste operations), and 1910.134 (Respiratory protection).

Hotels must provide accessible guest rooms, public areas, reservation systems, and auxiliary aids. A written accessibility plan is advisable.

Hotels must ensure that only EPA‑certified technicians handle refrigerants and that leak repair and recovery procedures are followed.

Many cities in Michigan, including Detroit, Grand Rapids, and Lansing, impose additional local lodging taxes. These are in addition to the 6% state tax. Business must register with the city treasurer or finance department. Example: Detroit Room Tax is 7% + 3% Tourism Assessment = 10% total local tax.

Required for all LLCs for federal tax purposes, even with no employees. Used for IRS reporting, state tax accounts, and banking. Apply online via IRS Form SS-4.

Required for all businesses operating within Detroit city limits, including hotels/motels. Specific to City of Detroit.

Zoning Verification Letter confirms property is zoned for hotel/motel use (e.g., B4, GR districts). Cite Detroit Zoning Ordinance No. 90-90 as amended.

Required for hotels per 2015 Michigan Building Code adopted locally. See fee schedule at source.

Complies with Detroit Sign Ordinance Chapter 18-7.

Hotels with pools require annual operational permit under Michigan Public Health Code Part 125.

Mandatory for hotels >15 rooms per NFPA 72 and local fire code. High-rise hotels require additional approvals.

Verifies compliance with building, fire, zoning codes for Assembly/Transient occupancy.

Hotels require 1 space per 2 guest rooms per zoning ordinance.

Required for motels/hotels under Michigan Public Health Code; specific to county outside Detroit.

Hotels permitted in C-MU, DT districts per GR Zoning Ordinance.

Required for all employers with one or more employees in Michigan under the Workers' Disability Compensation Act of 1969 (MCL 418.1 et seq.). Sole proprietors are not automatically exempt but may elect out if they meet criteria. Coverage must be secured through private insurer or self-insurance program approved by WCA.

While not mandated by Michigan state law, many municipalities or commercial landlords require general liability insurance as a condition of operation. Regulated by the Michigan Department of Insurance and Financial Services (DIFS) for solvency and compliance purposes.

Michigan requires hotels and motels with 10 or more rooms to register with the Bureau of Community and Health Systems. As part of registration, a surety bond of at least $1,000 may be required to ensure compliance with state laws and rules (e.g., health, safety, and recordkeeping). Authority under Public Act 287 of 1945 and Rule 325.11101 of the Michigan Administrative Code. Bond amount varies based on room count and compliance history.

Required under Michigan’s No-Fault Auto Insurance Law (MCL 500.3101 et seq.) for all motor vehicles registered to the business. Minimum liability coverage: $250,000 per person for bodily injury, $500,000 per accident for bodily injury, $100,000 for property damage (250/500/100). Personal auto policies do not cover business use.

Many hotels obtain permits through the state environmental agency under EPA authority.

Most hotels are considered Small Quantity Generators (SQG) and follow simplified requirements.

Hotel rate advertisements, “free” amenities, and online reviews must not be deceptive.

Current federal minimum wage is $7.25/hr; many states have higher rates – Michigan’s minimum wage is $10.10/hr (2024).

Hotels typically meet the employee threshold; must provide up to 12 weeks of unpaid leave.

E‑Verify is optional but widely used in the hospitality industry.

Most hotels obtain a state liquor license; the federal basic permit is required if the establishment engages in any wholesale or manufacturing activity.

Vehicles with ≤9 passenger seats (including driver) are exempt; larger vans or buses require FMCSA registration and compliance with safety regulations.

Many hotels provide retirement plans; if so, annual reporting is required.

Filing can be completed online via LARA’s Business Entity Search portal.

Applicable if the LLC elects to be taxed as a corporation. Pass‑through entities file personal income tax instead.

Members of an LLC taxed as a partnership report their share of income on Form 1040, Schedule C.

All hotels/motels must collect state sales tax on taxable goods and services.

Lodging tax rate is 6% state‑wide plus any local rates. Must file the same return as sales tax.

Required for all establishments serving alcohol under MLCC regulations. Businesses must carry at least $250,000 in liquor liability coverage per incident. This is a condition of licensure under the Michigan Liquor Control Code (Act 207 of 1933). Coverage must be maintained continuously while licensed.

Not legally required by Michigan law, but strongly recommended for hotels selling retail products (e.g., gift shop items, snacks, branded merchandise). Liability arises under common law and product liability statutes. Regulated indirectly through DIFS for insurer compliance.

Not mandated by Michigan law for hotel/motel operations. May be required by third parties (e.g., management contracts, franchisors). Covers claims of professional negligence (e.g., misrepresentation, failure to perform services). Optional but recommended for higher-risk services like event planning or concierge bookings.

All LLCs with employees or that file any federal tax return must have an EIN.

Summarizes total lodging tax collected and remitted for the year.

Employers must maintain continuous workers’ comp coverage and submit the annual payroll report.

Inspection reports are posted publicly; corrective actions must be completed within the timeframe specified.

Includes verification of fire alarms, extinguishers, egress routes, and sprinkler systems.

Required posters include the MIOSHA Notice, OSHA Job Safety and Health – It’s the Law, and others.

Includes FLSA, EEOC, Minimum Wage, Workers’ Compensation, and Unemployment Insurance posters.

Includes sales tax, lodging tax, payroll, and corporate tax records.

Renewal may require proof of compliance with fire, health, and building codes.

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