Michigan Business Tax, Allocation and Apportionment: Multistate Tax Compact 3-factor Formula

Posted on Wed, Dec 05, 2012

Affirming the lower court, the Michigan Court of Appeals held that a Michigan taxpayer was required to use the Michigan business tax (MBT) apportionment formula (100% sales) and that the taxpayer was not permitted to elect to use the Multistate Tax Compact’s apportionment formula (equally-weighted property, payroll, and sales). The taxpayer argued that the MBT apportionment formula was optional, and the Department of Treasury argued that the MBT apportionment formula was mandatory. The court noted that the MBT statute allowed taxpayers to request permission to use an alternate apportionment method so that unusual situations where the default formula caused distortion would not occur. However, the Compact allowed an election of right, presumably exercised in order to obtain a lower tax liability. Examining the statutory language, the court noted that the applicable provision (M.C.L. 208.1301) absolutely precluded any other apportionment formula except by petition.

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Tags: Michigan State and Local Tax (SALT), Tax, State and Local Tax, Ron Kaley, Michigan Business Tax

Corporate Income Tax Form Numbers and Description

Posted on Mon, Nov 19, 2012

Unfortunately, I was unable to attend last week’s Michigan Tax Conference.  However, while attending a separate conference I came across the new Michigan CIT form numbers for the upcoming filing season. I have listed below the form titles and numbers for the Standard Taxpayer, Financial Institutions, Insurance Companies, Flow-through related filings, and additional MBT forms, for taxpayers who have certificated credits and elect to continue filing the Michigan Business Tax return.  I do not have the forms, only the form number and description. They are as follows: 

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Tags: Michigan State and Local Tax (SALT), Tax, Ron Kaley, Michigan Business Tax

Michigan Supreme Court to Address the Unitary Business Principle and Combined Reporting of Apportionmet to the Personal Income Tax

Posted on Mon, Oct 15, 2012

In my blog dated August 2, 2012, I discussed combined unitary apportionment and Michigan’s Personal Income Tax.  In the blog, I mentioned an appeal where the court upheld the concept of unitary apportionment in FORREST L. PRESTON, Plaintiff-Appellee, vs. DEPARTMENT OF TREASURY, Defendant-Appellant and the Estate of THOMAS M. WHEELER and PATSY WHEELER, Petitioners-Appellees vs. DEPARTMENT OF TREASURY, Respondent-Appellant. 

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Tags: Michigan State and Local Tax (SALT), State and Local Tax, Corporate Income Tax, Ron Kaley, Michigan Single Business Tax, flow-through entity withholding, Michigan Business Tax, Individual Income Tax, Michigan

MBT Underpayment Penalty; Information Requested

Posted on Tue, Aug 14, 2012

Over the past few months I have had conversations and e-mails regarding the estimated penalty safe-harbor of $20,000, MCL 208.1501(1).  According to the law, a taxpayer under the Michigan Business Tax (MBT) must file an estimate return and pay estimated tax if the taxpayer expects a liability for the tax year to exceed $800.  The law continues as follows: 

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Tags: Tax, Corporate Income Tax, Ron Kaley, Michigan Business Tax, Michigan

PERSONAL INCOME TAX—Unitary and Apportionment of Income

Posted on Thu, Aug 02, 2012

Michigan's Court of Appeals has recently issued three opinions:

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Tags: Accounting, Tax, State and Local Tax, Corporate Income Tax, Michigan Business Tax, Individual Income Tax, Michigan, Law

Michigan Income Tax and MBT Audit Issues

Posted on Thu, May 31, 2012

Ed Kisscorni and I are starting our next round of seminars offered through the MACPA. The title of our seminar is, "Michigan Income Tax and MBT Audit Issues". The seminar is designed to dig into amendments associated with the Michigan Income tax act. We will be discussing issues surrounding flow-through entity withholding, nexus, apportionment and unitary for the corporate income tax, along with how they may impact flow-through entity withholding. I have included a copy of the table of contents, and links directly to the MACPA's website to assist you in registering. The first seminar is Monday, June 4 in Sterling Heights and then Friday, June 29 in Traverse City. 

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Tags: State and Local Tax, Corporate Income Tax, Ron Kaley, flow-through entity withholding, Michigan Business Tax, Individual Income Tax

Final Unitary Michigan Business Tax Returns With Differing Year-end's

Posted on Wed, Feb 01, 2012

Included in this blog is Michgan Department of Treasury, "FAQ U57".  You will find this FAQ helpful as you start preparing your client's final unitary MBT return(s).  The FAQ is not what I expected, but I think it is appropriate and helpful.

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Tags: Tax, Corporate Income Tax, Ron Kaley, Michigan Single Business Tax, Michigan Business Tax

Michigan Corporate and Individual Income Tax Clean-up Bills - Part II

Posted on Wed, Jan 04, 2012

Continued from: Part I " The governor's pen was busy in December." Several bills from Michigan's House and Senate were signed within the last week affecting Michigan's Corporate Income Tax and Individual Income Tax.

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Tags: State and Local Tax, Corporate Income Tax, Ron Kaley, Michigan Business Tax, Individual Income Tax

Michigan Corporate and Individual Income Tax Clean-up Bills - Part I

Posted on Wed, Jan 04, 2012

The governor's pen was busy in December. Several bills from Michigan's House of Representatives and Senate were signed within the last week affecting Michigan's Corporate Income Tax, Individual Income Tax, Single Business Tax, and Michigan Business Tax. I will cover the amendments over the next few blogs. Senate bills 368 and 369, concerning the Single Business tax, and "Disregarded Entities" under the Michigan Business tax will be covered separately. Click on the bill's name to access that specific bill on www.legislature.mi.gov.

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Tags: State and Local Tax, Corporate Income Tax, Ron Kaley, Michigan Single Business Tax, Michigan Business Tax, Individual Income Tax

MI Supreme Court Upholds Taxation of Public Pensions and ...

Posted on Tue, Nov 22, 2011

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Tags: State and Local Tax, Corporate Income Tax, Ron Kaley, Michigan Single Business Tax, Michigan Business Tax, Individual Income Tax