Bill Text: MI SB0674 | 2011-2012 | 96th Legislature | Chaptered

Bill Title: Income tax; other; apportionment of tax base for a flow-through entity; clarify. Amends sec. 661 of 1967 PA 281 (MCL 206.661).

Spectrum: Partisan Bill (Republican 1-0)

Status: (Passed) 2011-10-20 - Assigned Pa 0191'11 With Immediate Effect [SB0674 Detail]

Download: Michigan-2011-SB0674-Chaptered.html

Act No. 191

Public Acts of 2011

Approved by the Governor

October 17, 2011

Filed with the Secretary of State

October 18, 2011

EFFECTIVE DATE: January 1, 2012




Introduced by Senator Robertson


AN ACT to amend 1967 PA 281, entitled “An act to meet deficiencies in state funds by providing for the imposition, levy, computation, collection, assessment, and enforcement by lien and otherwise of taxes on or measured by net income; to prescribe the manner and time of making reports and paying the taxes, and the functions of public officers and others as to the taxes; to permit the inspection of the records of taxpayers; to provide for interest and penalties on unpaid taxes; to provide exemptions, credits and refunds of the taxes; to prescribe penalties for the violation of this act; to provide an appropriation; and to repeal certain acts and parts of acts,” by amending section 661 (MCL 206.661), as added by 2011 PA 38.

The People of the State of Michigan enact:

Sec. 661. (1) Except as otherwise provided in this part, the tax base established under this part shall be apportioned in accordance with this chapter.

(2) The tax base of a taxpayer whose business activities are confined solely to this state shall be allocated to this state. The tax base of a taxpayer whose business activities are subject to tax both within and outside of this state shall be apportioned to this state by multiplying the tax base by the sales factor calculated under section 663. For a taxpayer that has a direct, or indirect through 1 or more other flow-through entities, ownership interest or beneficial interest in a flow-through entity, the taxpayer’s business income that is directly attributable to the business activity of the flow-through entity shall be apportioned to this state using an apportionment factor determined under section 663 based on the business activity of the flow-through entity.

(3) A taxpayer is subject to tax in another state in either of the following circumstances:

(a) The taxpayer is subject to a business privilege tax, a net income tax, a franchise tax measured by net income, a franchise tax for the privilege of doing business, or a corporate stock tax.

(b) That state has jurisdiction to subject the taxpayer to 1 or more of the taxes listed in subdivision (a) regardless of whether that state does or does not subject the taxpayer to that tax.

Enacting section 1. This amendatory act takes effect January 1, 2012.

This act is ordered to take immediate effect.

Secretary of the Senate

Clerk of the House of Representatives