August 21, 2008 |
| Fi1. The MBT's film production credit (MCL 208.1455) provides, in part, a credit calculated as a specified percentage of "direct production expenditures". How will the criteria expressed in the definition of "direct production expenditures" |
| Fi2. a) Is a fee paid to a business located outside Michigan for processing a film production company's payroll at a location outside Michigan a qualified expense?
b) If not, does the answer change if an employee or agent is present in Michigan to |
| Fi3. Is the expense for production insurance paid to an out-of-state insurance company through a Michigan based broker/agent a qualified direct production expenditure? |
| Fi4. Does the purchase of tangible personal property through an 800 number answered outside of Michigan and delivered from a warehouse outside of Michigan qualify as a direct production expenditure if the seller collects and remits Michigan sales/u |
| Fi5. Is the rental of specialized motion picture equipment from a vendor located outside Michigan (and whose inventory is also located outside Michigan) a qualified direct production expenditure if the rental is handled by a Michigan based rental v |
| Fi6. Tax Return Filing: a) Is a taxpayer required to file an MBT tax return in order to obtain a film credit or refund?; b) If so, may the return be filed early (before the end of the return year)? |
| Fi7. Does a production company that fails to withhold or insure that the personal services company ("PSC") or professional employment organization ("PEO") withholds lose an otherwise available film credit? |
| Fi8. Do non-permanent fixtures such as honeywagons (a type of multi-room trailer used by film and television productions) and star trailers (larger trailers typically used by celebrities) qualify for the infrastructure credit? |
| Fi9. Are fringe benefits paid to crew members such as the employer's share of FICA, health insurance, and so forth eligible for the Film Production Credit? If so, are these expenditures considered "direct production expenditures" eligible for a 40 |
| Fi10. MCL 208.1455 provides for an MBT Film Production Credit "equal to 42% of direct production expenditures for a state certified qualified production in a core community." What exactly does "in a core community" mean?" Where the production is |
| For more Film Credit information, visit www.michigan.gov/filmoffice. |
August 19, 2008 |
| B31. If a C corporation owns 56% of a flow-through entity, and the two meet the MBT definition of a unitary group, how does the corporation report all of the income of the flow-through entity when all it receives from the entity is a K-1? Also, do |
| B32. Are royalties received from a foreign entity included in the tax base of the MBT? |
| C.37 What is the proper treatment for an SBT carryforward credit which has only one year of carryforward remaining under the SBT dictated lifespan? Does MCL 208.1401 extend the life of the credit, or is it limited by the original SBT term? |
| M.56 Are retailers who drop ship products from suppliers to customers within and outside of Michigan entitled to deduct the cost of these items from gross receipts as purchases from other firms? |
| U37. Is it possible to have a unitary group of financial institutions under the MBT? How will such groups file a combined return? |
| B33. Does business income include casual transactions or isolated sales? |
| C.38 Do dividends that represent distribution of previously taxed S corporation earnings qualify as dividends for purposes of determining an "active shareholder"? |
| M57. Are royalties received from a foreign entity included in the tax base of the MBT? |
| U38. For purposes of the private equity fund credit under MCL 208.1453, if a private equity fund manager is an entity that is a member of a unitary business group, does the calculated credit percentage apply to the tax liability of the
entire uni |
| B.34 How should inter-company transactions between members of a unitary business group be eliminated when the members have different year ends? |
| C.39 For purposes of the private equity fund credit under MCL 208.1453, if a private equity fund manager is an entity that is a member of a unitary business group, does the calculated credit percentage apply to the tax liability of the entire unita |
| M58. How should inter-company transactions between members of a unitary business group be eliminated when the members have different year ends? |
| U39. Are partners deemed to own each others' holdings by attribution under section 318 of the Internal Revenue Code? |
| C.40 Is compensation under the MBT reported on a cash or accrual basis? |
| U40. A dental practice organized as a sole proprietorship became a
professional limited liability company ("PLLC") effective January 1, 2008. For
federal income tax purposes, the PLLC is a disregarded entity and the member
reports h |
| Mi35. Will public libraries receive any moneys from the Michigan Business Tax? There was a provision in the Single Business Tax Act that directly funded public libraries, will this continue under the MBT? |
| N12. Under the MBT nexus standards for the modified gross receipts tax, is owning a partnership interest considered physical presence in Michigan? The partnership owns rental real property in Michigan. |
August 18, 2008 |
| U36. Are foreign entities includable in unitary business group? What if the foreign entity is the single member of a domestic single member limited liability company disregarded for federal tax purposes? |
| Mi34. What is the meaning of the acronym FIRE which appears in the presentation entitled MBT Overview-August 1, 2007 on the MBT Website? |
| A33. Can a taxpayer who claims an error was made in the calculation of an
MBT quarterly estimated payment request a refund of that payment without filing
an annual MBT return? |
June 12, 2008 |
| C33. How are gross receipts computed on an installment sale of a capital asset? Is the realized installment sale gain included in the two tax bases? How is the investment tax credit (ITC) affected? |
| C34. What kinds of expenses qualify for the MBT credit under MCL 208.1451 that applies to beverage distributors who originate deposits on beverage containers? |
| C35. If two shareholders of a C corporation (X Corp) are themselves C corporations (Y Corp & Z Corp) & one of Y Corp's shareholders is paid a management fee for managing the business of X Corp, does the management fee factor into the ... |
| C36. Can a taxpayer use data from its SBT tax periods in calculating the loss adjustment for purposes of determining eligibility for the Alternative Small Business Credit under MCL 208.1417? |
| Mi32. Can a taxpayer use data from its SBT tax periods in calculating the loss adjustment for purposes of determining eligibility for the Alternative Small Business Credit under MCL 208.1417? |
| Mi33. What kinds of expenses qualify for the MBT credit under MCL 208.1451 that applies to beverage distributors who originate deposits on beverage containers? |
| M55. How are gross receipts computed on an installment sale of a capital asset? Is the realized installment sale gain included in the two tax bases? How is the investment tax credit (ITC) affected? |
May 30, 2008 |
| A32. Will Voluntary Disclosure continue with the Michigan Business Tax? |
| B29. We manufacture customized tooling systems, which we then sell to our customer. After the sale, although the customer owns the tooling, it physically remains at our plant, and we use the tooling to manufacture the customer's product... |
| B30. How are accounts receivable factoring companies treated for purposes of the Michigan Business Tax Act (MBTA)? |
| Mi29. Are condominium, homeowners, and timeshare associations taxed under IRC 528 or IRC 277 exempt from the MBT? |
| Mi30. Will Voluntary Disclosure continue with the Michigan Business Tax? |
| M52. We manufacture customized tooling systems, which we then sell to our customer. After the sale, although the customer owns the tooling, it physically remains at our plant, and we use the tooling to manufacture the customer's product... |
| Mi31. Does the MBT provision which states that the MBT is imposed, |
| M53. Are Michigan lottery dealers required to include the proceeds from retail lottery ticket sales when calculating gross receipts, or are they only required to include the amount of the commission that they receive on such sales? |
| M54. How are accounts receivable factoring companies treated for purposes of the Michigan Business Tax Act (MBTA)? |
| N11. Does a mail order company that does not have physical presence in Michigan and was not previously subject to the SBT, but mails catalogs to persons within Michigan and has $350,000 or more in Michigan sales have nexus for purposes of the... |
| U34. For purposes of determining a unitary business group, how is the control test interpreted and applied? |
| U35. Do the $350,000 threshold amount for taxpayer nexus under MCL 208.1200, the $350,000 threshold amount for filing of returns and payment of MBT under MCL 208.1505, and the range of gross receipts between $350,000 and $700,000 concerning the... |
April 15, 2008 |
| B26. Does the deduction for net earnings from self employment exempt self-employed individuals from taxation under the MBT? |
| B27. Under the Michigan Business Tax Act (MBTA) will a taxpayer receive a deduction for the modified gross receipts tax paid when calculating the business income tax base? |
| B28. Is the gain recognized on the one time sale of business assets and goodwill by an entity to another entity taxed under the Michigan Business Tax (MBT)? |
| Mi25. Does the MBT follow the federal check-the-box regulations? |
| Mi26. When is the final SBT return due for a fiscal year taxpayer? Can a fiscal year filer request an extension for the final SBT return? |
| Mi27. Are controlled foreign corporations ("CFC's") under IRC 957 taxpayers under the MBT? Can controlled foreign corporations be members of a unitary business group? What if the controlled foreign corporation is a disregarded entity of a U.S. ... |
| Mi28. Are single member limited liability companies and qualified subchapter S subsidiaries ("QSubs") disregarded for federal tax purposes also disregarded under the MBT? |
| M49. Is the gain recognized on the one time sale of business assets and goodwill by an entity to another entity taxed under the Michigan Business Tax (MBT)? |
| M50. Does the deduction for net earnings from self employment exempt self-employed individuals from taxation under the MBT? |
| M51. Are vehicles taken as trade-ins and later sold by an auto dealer considered "purchases from other firms" under the MBT, and thus deductible from gross receipts in determining the modified gross receipts tax base? |
| U30. (Answer rescinded, replaced by U36.) Are foreign entities includable in unitary business group? What if the foreign entity is the single membe |
| U31. Are controlled foreign corporations ("CFC's") under IRC 957 taxpayers under the MBT? Can controlled foreign corporations be members of a unitary business group? What if the controlled foreign corporation is a disregarded entity of a U.S. ... |
| U32. For a unitary business group, MBT Section 201(3) requires the deduction of items of income and related deductions including dividends between members of the group when computing the business income tax base. Section 203(3) requires the ... |
| U33. What is a unitary business group? |
April 9, 2008 |
| U18. How does the MBT filing threshold apply to a unitary business group comprised of several members if one or more of the members has apportioned gross receipts of less than $350,000? |
April 1, 2008 |
| B24. Is the sale of stock by a stockholder in a closely held corporation back to the corporation or another stockholder subject to MBT? |
| B25. I am a 100% shareholder of a corporation that does business in Michigan. I am a nonresident of Michigan. The corporation is organized as a C corporation. I sell 100% of the stock of the corporation which results in a capital gain... |
| C32. What expense items are included in compensation for purposes of the compensation credit provided for at MCL 208.1403(2)? What accounting method is used to determine compensation? |
| Mi23. Can a unitary group, as defined in the MBT, enter into a voluntary disclosure agreement with the Department of Treasury under MCL 205.30c if one member of the group would be disqualified on its own? |
| Mi24. If a taxpayer is disqualified from voluntary disclosure, available at MCL 205.30c, under the Single Business Tax, is the taxpayer disqualified under the Michigan Business Tax? Specifically, if a taxpayer filed SBT returns, is it considered.. |
| M46. Is the sale of stock by a stockholder in a closely held corporation back to the corporation or another stockholder subject to MBT? |
| M47. Are dividends from subsidiaries and interest income from unrelated parties included in the modified gross receipts tax base in the MBT? |
| M48. I am a 100% shareholder of a corporation that does business in Michigan. I am a nonresident of Michigan. The corporation is organized as a C corporation. I sell 100% of the stock of the corporation which results in a capital gain... |
| U26. Can a unitary group, as defined in the MBT, enter into a voluntary disclosure agreement with the Department of Treasury under MCL 205.30c if one member of the group would be disqualified on its own? |
| U27. How are the Business Income and Modified Gross Receipts tax bases calculated for a unitary business group? |
| U28. How will MCL 208.1503, which gives taxpayers the choice of two filing methods for the first MBT return, apply to a unitary group where members of the group have different tax years? |
| U29. How must a unitary business group file its combined return when members of the group have different tax years? |
March 17, 2008 |
| A31. When is the final short period Single Business Tax (SBT) return due for a fiscal year taxpayer? If the taxpayer chooses the annual method for calculating the final SBT liability, how does it file timely for the fiscal year that is required... |
| B19. What is the definition of intangible asset as used in computing the business income tax base? |
| B20. Our company adds a handling charge to all customer invoices. Is this handling charge taxable under the MBT? |
| B21. A real estate limited partnership owns an apartment project in Michigan. The partnership is in the process of selling the apartment project to avoid foreclosure. The apartment project is the partnership's only asset and the partnership will... |
| B22. How is a like-kind exchange treated under the MBT? |
| B23. Is an individual person who earns more than $350,000 in interest and dividends for the tax year subject to the MBT? Are the person's capital gains from sales of stock subject to the MBT? |
| C31. My company intends to purchase a significant piece of business equipment in the near future. This equipment is the type of property that is or will become eligible for depreciation for federal tax purposes. Under the MBT, can my company ... |
| M40. Our company adds a handling charge to all customer invoices. Is this handling charge taxable under the MBT? |
| M41. My company intends to purchase a significant piece of business equipment in the near future. This equipment is the type of property that is or will become eligible for depreciation for federal tax purposes. Under the MBT, can my company... |
| M42. A real estate limited partnership owns an apartment project in Michigan. The partnership is in the process of selling the apartment project to avoid foreclosure. The apartment project is the partnership's only asset and the partnership will... |
| M43. How is a like-kind exchange treated under the MBT? |
| M44. Is an individual person who earns more than $350,000 in interest and dividends for the tax year subject to the MBT? Are the person's capital gains from sales of stock subject to the MBT? |
| M45. How is "fuel" defined for purposes of the "purchases from other firms" deduction under MCL 208.1113(6)? Does it include the cost of gas for all of a business' automobiles currently in use, including owned and leased vehicles? Does it... |
| N9. Non-U.S. corporations qualify as taxpayers under the MBT. For purposes of the business income tax component of the MBT, will the Department recognize the protection of PL 86-272 for non-U.S. corporations? |
| N10. Does the protection of Public Law 86-272 apply to financial institutions? |
March 6, 2008 |
| A30. Will a taxpayer be required to make a payment with an extension request or is the listing of estimated payments made going to be accepted as it is in the Single Business Tax? |
| B18. May taxpayers, including corporations and partnerships, take the IRC 199 deduction for MBT purposes? |
| C28. Under MCL 208.1403(2), a taxpayer may claim a credit against the MBT equal to a specified percentage of the taxpayer's "compensation in this state." What is the definition of "compensation in this state"? |
| C29. How is the Small Business Alternative Credit under MCL 208.1417 calculated by a taxpayer that is a unitary business group? How do the disqualifiers and percentage reducers work? |
| C30. How do foreign persons with no U.S. federal taxable income calculate adjusted business income for purposes of the Small Business Alternative Credit under MCL 208.1417? |
| M38. May taxpayers, including corporations and partnerships, take the IRC 199 deduction for MBT purposes? |
| M39. May any taxpayer separately itemize and collect the tax imposed under the Michigan Business Tax Act ("MBTA") from its customers in addition to sales price? |
| N8. An out-of-state company has a remote employee located in Michigan. The out-of-state company has no sales or business activities in Michigan. Does the out-of-state company have nexus with Michigan under the MBT? |
| U23. How does a unitary business group register under the MBT? |
| U24. If five or fewer persons who are unrelated individuals, estates or trusts own a controlling interest in a brother-sister group of entities, will that satisfy the control test for purposes of qualifying as a unitary business group? |
| U25. Can brother-sister corporations wholly owned by a single person be members of a unitary business group? If so, how are the tax bases calculated? |
February 28, 2008 |
| A28. The SBT has a Notice of No Return, Form C-8030 to be filed by taxpayers who were not required to file. Will there be a similar MBT form? |
| A29. How must a fiscal year taxpayer calculate quarterly estimated payments if one quarter straddles the period in which the SBT ends and the MBT begins? |
| B15. Does the sale by an individual of a direct investment in a corporation, partnership or LLC that is not traded on a public exchange constitute "personal investment activity" such that the income and proceeds from such a sale are exc |
| B16. Public Act 145 of 2007 amended the MBT to exclude certain personal investment activities from business income and gross receipts. |
| B17. Limited liability companies are included in the efinition of "person" under the MBT. Assuming that the federal "check the box" rules are followed, does the business income adjustment set forth at section 201(2)(e), |
| C24. Can a pre-2008 Brownfield credit or Historic Preservation credit of a unitary business group member be used in 2008 and thereafter against the tax liability of the entire unitary business group? |
| C25. Regarding the industrial personal property tax credit under the MBT, will the Department continue to look to the parcel classification assigned by the local property tax assessor for qualification for the credit, as it has done under the |
| C26. The MBT Act provides the following credits will be taken sequentially before any other credits: compensation and investment credits (MCL §208.1403) |
| C27. MCL §208.1403(3)(d)-(f) provides for investment credit recapture. The recapture language includes the limiters "to the extent used and at the rate used." Does this limiting language only apply to assets acquired during SBT tax years? |
| M30. Does the sale by an individual of a direct investment in a corporation, partnership or LLC that is not traded on a public exchange constitute "personal investment activity" such that the income and proceeds from such a sale are exclu |
| M31. Public Act 145 of 2007 amended the MBT to exclude certain personal investment activities from business income and gross receipts. Which taxpayers may exclude personal investment activity from business income and gross receipts? What about fa |
| M32. A unitary business group under the MBTA is required to file a combined return. For purposes of calculating the unitary business group's modified gross receipts tax base, does the group eliminate all inter-company transactions between members o |
| M33. How is the "purchases from other firms" subtraction determined? The statute uses the term "purchased" and "acquired"; neither of which are defined in the law. What method of accounting will be used |
| M34. Is an SBT business loss related to a final short period SBT return that will be applied to the MBT based on a full twelve-month year or on the short period year? If the taxpayer uses the proration method to calculate its final |
| M35. Is a fiscal year taxpayer required to apply its final year SBT business loss against its first short period MBT return? |
| M36. The definition of "modified gross receipts tax base" makes no provision for a negative modified gross receipts tax base. Will Treasury administratively allow a carryforward of a negative modified gross receipts tax base? |
| M37. To qualify as "materials and supplies" or "purchases from other firms" deductible from gross receipts under MCL 208.1113(6), must assets be directly related to inventory or vice versa? |
| Mi21. Will a taxpayer whose final SBT return is for a period of less than four months need to remit SBT estimates? For example, will a taxpayer with a fiscal year end of September 30, 2008, |
| Mi22. For purposes of calculating the $350,000 filing threshold in section 505(1); will "gross receipts" as defined in section 111 be used, or will
the filing threshold be determined by "sales" as defined in section 115? What |
| N5. For purposes of apportionment, in determining whether a Michigan-based taxpayer has nexus with a state other than Michigan pursuant to section 301(3), must gross receipts in any "one" state or in all states equal or exceed $350,000 in |
| N6. Regarding the MBT nexus standard found in section 200(1), which is based upon the taxpayer actively soliciting sales in Michigan and having "gross receipts of $350,000.00 or more sourced to this state," will the $350,000.00 be calcula |
| N7. Please provide examples of when and how an internet web site can be determined to be "purposeful" or "active solicitation". |
| U20. A unitary business group under the MBTA is required to file a combined return. For purposes of calculating the nitary business group's modified gross receipts tax base, does the group eliminate all inter-company transactions between members of |
| U21. When members of a unitary business group have different accounting methods (for example, cash and accrual) is uniformity required or do they report using each member's accounting method? |
| U22. Can a pre-2008 Brownfield credit or Historic Preservation credit of a unitary business group member be used in 2008 and thereafter against the tax liability of the entire unitary business group? |
February 15, 2008 |
| A26. (Answer rescinded, replaced by A30)
Will a taxpayer be required to make a payment with an extension request or is the isting of estimated |
| A27. Does the $350,000 filing threshold apply to just the gross receipts tax or to both the gross receipts and business income taxes? |
| Ap5. Under MCL 208.1115, "sales" means "[f]or taxpayers not engaged in any other business activities, sales include interest, dividends, & other income from investment assets & activities & from trading assets & activities... |
| B12. Under the MBT, will there be a depreciation deduction, or will Michigan conform to federal depreciation rules? |
| B13. For purposes of applying section 201(2)(f)(ii) of the MBTA, does the phrase "subject to tax in another jurisdiction" refer only to taxation by another state, or does it also include taxation by a foreign country? |
| B14. Is interest and dividend income included in business income under the Michigan Business Tax (MBT)? |
| C22. Is the farmland preservation credit available under the Michigan Business Tax? |
| C23. How were the rates of the Compensation Credit, the Investment Tax Credit, and the Research and Development Credit impacted by the passage of PA 145, which added the surcharge to the MBT? |
| Mi20. Is the MBT going to accept the federal treaty benefit on the 1120F? |
| M26. Does the Modified Gross Receipts Tax component of the Michigan Business Tax Act tax capital gains of investors, including trusts, Family Limited Partnerships and individuals? |
| M27. Under the MBT, will there be a depreciation deduction, or will Michigan conform to federal depreciation rules? |
| M28. Do wholesale gasoline purchases and applicable excise taxes paid by a gasoline retailer qualify as "purchases from other firms" under Section 113(6) of the Michigan Business Tax Act ("MBTA")? |
| M29. Does partnership income constitute gross receipts of the partner for purposes of the modified gross receipts tax portion of the MBT? |
| U19. Is an individual a member of a unitary business group with the entities in which the individual has a controlling interest? |
January 14, 2008 |
| All questions under this date replaced a previous question. |
| A22. Will taxpayers need to calculate the business income, modified gross receipts, and surcharge separately and pay 85% of each to meet the estimated tax payment safe harbor provision in order to avoid interest? |
| A23. How are quarterly estimates calculated? |
| A24. Will a safe harbor be allowed for 2008 estimates based on the 2007 SBT return? |
| A25. How does a taxpayer with a fiscal year end calculate tax under the MBT for estimate purposes? |
| C21. What is the compensation credit? |
January 11, 2008 |
| Ap4. What is the location of investment partnerships? Is it based on the residence of the general partner, the location of the brokerage firm, the residences of the majority of partners, or where the partnership was formed? |
| B7.Are system software royalties, excluded from the determination of tax liability under the Single Business Tax Act ("SBTA")(see MCL 208.9(4)(g)(viii) and (7)(c)(vii)), likewise excluded from the determination of tax liability under the Michigan |
| B8. Do the business income tax and modified gross receipts tax components of the MBT apply to individuals, estates, and trusts or family limited partnerships (FLIP)s that are specifically established for estate planning purposes, on income from |
| B9. If an individual owns 100% of an S corporation law practice with gross receipts of $500,000, net income of $100,000 after wages of $250,000, and also has the following income not related to the S corporation or any other trade or business: |
| B10. If a business or unitary group taxpayer has a negative business income tax base, is the 4.95% tax rate applied to the negative business income base, with the result then netted against a positive modified gross receipts tax to determine |
| B11. If a Michigan LLC has a nonresident corporate partner, does that partner file an MBT return and report and pay tax on it's share of LLC income at the same 4.95% [rate]? |
| C14. Under the MBTA, is the section 281 surcharge imposed before or after available credits are applied? Does the surcharge apply to both the modified gross receipts tax and the business income tax? |
| C15. Is the Arts and Culture credit available for donations made to science museums? |
| C16. What types of expenses qualify for the MBT's "research and development" credit? |
| C17. Is there a filing threshold phase-in for the Michigan Business Tax? |
| C18. Does Schedule C (sole proprietor) income of over $180,000.00 preclude the taxpayer from using the Small Business Alternative Credit? |
| C19. How will unused carryforward credits under the Single Business Tax Act (SBTA), the application of which is limited to tax years 2008 and 2009 under the Michigan Business Tax Act (MBTA), be treated for fiscal year taxpayers? |
| C20. How is stock ownership determined with respect to Small Business Alternate Credit disqualifiers? Will the attribution rules used for the SBT and found in IRC section 318 apply when computing the active shareholder rules under the MBT? |
| Mi11. Will an Employee Stock Ownership Plan ("ESOP") be liable for Michigan income tax under the Michigan Income Tax Act ("ITA"), 1967 P.A. 281, for it's share of flow-through income from a S corporation that is subject to MBT? |
| Mi12. Can new motor vehicle and watercraft dealers who separately itemize and collect the modified gross receipts (MGR) tax from customers, in addition to the sales price, collect amounts in excess of the amount of taxes remitted to the Department? |
| Mi13. Are cooperatives organized under IRC 1381(a)(2) exempt from the MBT? |
| Mi14. Will charitable trusts be subject to the MBT? |
| Mi15. If an entity is subject to the Business Income Tax, will the entity's members/shareholders be subject to Michigan personal income tax? |
| Mi16. Are small businesses exempt from the imposition of the surcharge? |
| Mi17. Under the MBTA, is the section 281 surcharge imposed before or after available credits are applied? Does the surcharge apply to both the modified gross receipts tax and the business income tax? |
| Mi18. (Answer rescinded, replaced by Mi28.) Are limited liability companies subject to the MBT? |
| Mi19. Under the Michigan Business Tax Act (MBTA) will corporations still be able to deduct the statutory exemption from the adjusted tax base before calculating tax as was available under the Single Business Tax Act (SBTA)? |
| M11. Are system software royalties, excluded from the determination of tax liability under the Single Business Tax Act ("SBTA") (see MCL 208.9(4)(g)(viii) and (7)(c)(vii)), likewise excluded from the determination of tax liability under the |
| M12. Do the business income tax and modified gross receipts tax components of the MBT apply to individuals, estates, and trusts or family limited partnerships (FLIP)s that are specifically established for estate planning purposes, on income from |
| M13. If an individual owns 100% of an S corporation law practice with gross receipts of $500,000, net income of $100,000 after wages of $250,000, and also has the following income not related to the S corporation or any other trade or business: |
| M14. What are purchases from other firms? |
| M15. If a business or unitary group taxpayer has a negative business income tax base, is the 4.95% tax rate applied to the negative business income base, with the result then netted against a positive modified gross receipts tax to determine |
| M16. Should a taxpayer use the cash or accrual method when determining gross receipts under the MBT? |
| M17. Does the "materials and supplies" provision in the definition of ?purchases from other firms" at MCL 208.1113(6)(c) apply to service providers? |
| M18. Must a company that receives dividend and interest income from a partnership include those amounts in gross receipts? |
| M19. Is use tax collected by a retail business considered part of its modified gross receipts under the Michigan Business Tax? |
| M20. Do construction subcontractors have to be licensed in order for payments made to such subcontractors to be considered "purchases from other firms" under section 113(6)(e) of the Michigan Business Tax Act ("MBTA")? |
| M21. Can credit card processing fees be deducted from gross receipts when determining the modified gross receipts tax base under the Michigan Business Tax Act ("MBTA")? |
| M22. To calculate the modified gross receipts tax base, may contractors deduct from gross receipts all amounts paid to subcontractors as purchases from other firms? |
| M23. For purposes of MCL 208.1113(6)(e), how is subcontractor defined? |
| M24. Must a contractor enter into a written contract with subcontractors in order to reduce gross receipts by the amount of payments made to subcontractors for a construction project? |
| M25. Can modified gross receipts (MGR) tax separately collected from customers by new motor vehicle dealers and new or used watercraft dealers be remitted with monthly sales, use and withholding returns? |
| N3. If a flow through entity establishes nexus for either or both the business income tax or modified gross receipts tax under the MBTA, do the individual partners or shareholders automatically acquire nexus for individual income tax purposes |
| N4. For purposes of apportionment under the MBT, what jurisdictional standard will be applied to determine whether a taxpayer is subject to tax in another state? |
| U12. How does a unitary business group file under the MBT when one or more of the members of the unitary business group do not have nexus with Michigan? |
| U13. How must a foreign insurer file for purposes of the retaliatory tax when the insurer's state of incorporation requires unitary filing? |
| U14. Section 511 of the MBTA states that "Each United States person included in a unitary business group or included in a combined return shall be treated as a single person..." Does this mean that all phase-ins, thresholds, credit limits & other.. |
| U15. Does a unitary group of insurance companies have to file a combined MBT return? |
| U16. If you are an entity within the unitary group that does not have nexus without application of the unitary principal, are your shareholders liable for Michigan personal income tax? |
| U17. How is the business income of a unitary business group determined when one member uses cash basis accounting and the other member uses the accrual method and their tax year ends are different? |
December 28, 2007 |
| F1. Do nonresident financial institutions located outside Michigan whose only activity in Michigan consists of an ownership interest in loans secured in whole or in part by real property located in Michigan have nexus under the MBT? |
December 20, 2007 |
| B5. Is the deduction provided under MCL 208.1201(2)(i) altered by the MBT surcharge? |
| B6. Does the deduction provided under MCL 208.1201(2)(i) reduce the MBT surcharge imposed under MCL 208.1281(1)? |
November 28, 2007 |
| A21. (Answer rescinded, replaced by A25) How does a taxpayer with a fiscal year end calculate tax under the MBT for estimate purposes? |
| Ap3. Does the Michigan Business Tax Act (MBTA) provide for "throw back sales"? |
| B4. Are capi |
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