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