Treasury is reviewing the recently enacted tax law changes, including the new Marijuana Wholesale Tax. Developing clear and accurate information for tax stakeholders is our top priority. This guidance will be posted to our website in the coming weeks.
Nexus & Apportionment 15. If a taxpayer for apportionment purposes is unitary with a flow-through entity, how do I calculate the amount of sales to be included in that taxpayer's apportionment factor?
To determine the amount of the flow-through entity's Michigan sales that will be added to the numerator of the taxpayer's apportionment factor, start with the entire amount of the flow-through entity's Michigan sales and then subtract from that amount any Michigan sales eliminations, (Michigan sales the flow-through entity made to the taxpayer and Michigan sales made to another flow-through entity unitary with the taxpayer). Multiply the remaining Michigan sales by the taxpayer's percentage of ownership of that flow-through entity. Include this amount in the numerator of the taxpayer's apportionment factor. This is shown in the equation below:
Michigan sales to be included = (FTE's MI sales — eliminations) x ownership percentage
To determine the amount of the flow-through entity's total sales to be added to the denominator of the taxpayer's apportionment factor, start with the entire amount of the flow-through entity's total sales and then subtract from that amount sales eliminations, (total sales the flow-through entity made to the taxpayer and total sales made to another flow-through entity unitary with the taxpayer). Multiply the remaining total sales by the taxpayer's percentage of ownership of that flow-through entity. Include this amount in the denominator of the taxpayer's apportionment factor. This is shown in the equation below:
Total sales to be added = (FTE's total sales — eliminations) x ownership percentage