Corporate Tax Base 17. The CIT tax base requires an addition for taxes measured on net income, to the extent deducted federally. MCL 206.623(1)(b). What portion of the Michigan Business Tax must be included in this add back?

A taxpayer must add back, to the extent deducted federally, only that portion of MBT liability corresponding to the business income tax base. Taxpayers can find this number on Form 4567, MBT Annual Return.

The portion of the MBT based on gross receipts is privilege tax and not a tax on income. MCL 208.1203(2). The MBT surcharge is calculated as a "percentage of the taxpayer's tax liability" and, by its plain terms, is not calculated on a taxpayer's income. MCL 208.1281(1). Accordingly, the portion of MBT liability attributable to either the gross receipts tax base or the surcharge is not a required addition to the CIT tax base.

Most CIT taxpayers will not have paid taxes under the MBT for tax years after 2012. Additionally, the MBT surcharge is no longer levied beginning January 1, 2017.