Michigan: Revised Notice on Michigan Business Tax Treatment of Disregarded Entities Reflects Recently Enacted Legislation

State Tax Matters:

Income/Franchise:
Notice to Taxpayers Regarding Federally Disregarded Entities and the Michigan Business Tax, Mich. Dept. of Treas. (issued 11/29/10; revised 4/30/11; revised 10/3/11; revised 11/15/11; revised 1/26/12). The department has once again updated its notice on the Michigan Business Tax (MBT) treatment of federally disregarded entities to include legislative amendments that were enacted on December 27, 2011 [See previously issued Multistate Tax Alert for more details on this new law], which clarified the manner in which a federally disregarded entity is treated for MBT purposes. The new law clarification is retroactive to January 1, 2008, and provides that a “person” that is a disregarded entity for federal income tax purposes under the Internal Revenue Code shall be classified as a disregarded entity for MBT purposes.

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