SBT Frequently Asked Questions - General

What activity is subject to the SBT?

The SBT applies to "business activity," which includes:

  • The sale of real or personal property in exchange for a tangible or intangible consideration.
  • Property rental, including both real property and personal property.
  • Performance of a service for a fee, except services rendered as an employee or services rendered as the director of a corporation.

What persons or activities are exempt from the SBT?

The following may be exempt from the SBT. Each of these exemptions, however, has some restrictions.

  • Most persons, other than non-US persons, who are exempt from federal income tax under the Internal Revenue Code.
  • Nonprofit cooperative housing corporations.
  • Production of agricultural goods, if the taxpayer's primary activity is production of agricultural goods.
  • Partners of partnerships and shareholders of Sub S corporations (unless they have other business activities). Partnerships and Sub S corporations, however, are subject to the SBT.

Partners and shareholders should contact the Individual Taxes Division at 517-636-4486 for information on Michigan income tax filing requirements.

Who is subject to the SBT?

All persons engaged in a "business activity" in Michigan are subject to the SBT. A "person" includes an individual, trust, estate, and every type of business entity.

Persons engaged in "business activity" both within and without the State of Michigan should refer to RAB 98-1 "Single Business Tax Nexus Standards" for guidance.

Who must file an SBT return?

Any "person" engaged in a business activity in Michigan whose gross receipts allocated or apportioned to Michigan are $350,000 or more is required to file a return.

Gross receipts include all receipts derived from a business activity including rental and lease receipts. If a business operated for less than 12 months (and is not a sole proprietor), it must annualize allocated or apportioned gross receipts to determine whether it meets the filing requirement. Special rules apply for controlled groups.

What are the filing requirements for a member of a controlled group of entities?

If you are a member of an affiliated group, a controlled group of corporations or an entity under common control, the group must combine its members' allocated or apportioned gross receipts on Form C-8010AGR, Single Business Tax Adjusted Gross Receipts For Controlled Groups, to determine if members of the group are required to file.

  • Do not include a member whose allocated or apportioned gross receipts are less than $100,000.
  • Members whose allocated or apportioned gross receipts equal or exceed $100,000 are required to file a return if the group's allocated or apportioned gross receipts are $350,000 or more.
  • Each member's business activities attributable to its tax year ending within a calendar year must be consolidated on Form C-8010AGR.
  • Members whose allocated or apportioned gross receipts are less than $100,000 must include their business activity to determine the small business credit for the controlled group on Form C-8009, Single Business Tax Allocation of Statutory Exemption, Standard Small Business Credit and Alternate Tax for Members of Controlled Groups.
  • Gross receipts of all members must also be included to determine the Adjusted Gross Receipts Percentage for calculating the Investment Tax Credit on Form C-8000ITC, Single Business Tax Investment Tax Credit.

Do I need to file an SBT return if my allocated or apportioned gross receipts are below the filing requirement ($350,000 for tax years beginning after 2002)?

If your allocated or apportioned gross receipts are below the filing requirement, you are not legally required to file a return. There may be situations in which you choose to file; for example, to allow a business loss or credit carryforward to remain viable for a subsequent year.