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Nexus & Apportionment 4. How does a unitary business group apportion its tax base when some members of the group do not have nexus with Michigan?
For a unitary business group with business activities within and without Michigan, as defined in MCL 206.661(2), the unitary business group's corporate income tax base is apportioned to Michigan by multiplying it by the combined sales factor of the members of the unitary business group. The tax base of a unitary business group is calculated according to MCL 206.623 and 206.691, combining all the unitary business group members' business income and eliminating all transactions between members. The sales factor is Michigan sales divided by total sales. The sales of all members of the unitary group are included in both the numerator and the denominator. Transactions between unitary business group members are also eliminated when determining the group's apportionment. A unitary business group member's business income and sales are included in the calculation of the tax base and apportionment whether or not the member has nexus with Michigan.