Yes, but generally only as part of the modified gross receipts tax component
of the MBT.
Royalties - including those received from foreign persons - are included in
gross receipts and the gross receipts tax base for purposes of the modified
gross receipts tax. MCL 208.1111(1), 208.1203.
However, for business income tax purposes, royalties received "from persons
other than United States persons and foreign operating entities, including, but
not limited to, amounts determined under section 78 of the [IRC] or sections 951
to 964 of the [IRC]" are subtracted from business income "to the extent included
in federal taxable income." MCL 208.1201.
Foreign entities - and foreign operating entities as defined by MCL 208.1109 -
cannot be included in a unitary business group. Therefore, intercompany
eliminations that would otherwise remove intra-unitary business group
transactions from the tax bases under are not available to royalties paid to or
received by a foreign entity.
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