Form 4132 - Voluntary Disclosure - Multi-Year Apportionment Schedule For Single Business Tax Page 2
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4Instructions for Form 4132,
Voluntary Disclosure - Multi-Year
Apportionment Schedule for Single Business Tax
GENERAL INSTRUCTIONS
The factor is computed by dividing the wages paid in
Michigan during the tax year (line 10) by the total wages paid
Your Michigan tax is based only on the business activity you
everywhere (line 11).
conduct in Michigan. This activity is measured by three
factors: property, payroll and sales.
Sales Factor
Each factor is weighted; the weighted figures are then added
Sales include the amounts received by the taxpayer as
to determine the portion of activity taxable in Michigan.
consideration from the following:
Refer to Table 2 for the weighting percentages by tax year.
• The transfer of title to, or possession of, property that is
Carry all percentages to six decimal places. Do not round
stock in trade or other property of a kind which would
percentages. For example, 24.154256 becomes 24.1542%
properly be included in the inventory of the taxpayer if on
(.241542).
hand at the close of the tax period, or property held by the
taxpayer primarily for sale to customers in the ordinary
Complete the apportionment schedule using amounts for
course of its trade or business.
your business activity only. Do not include amounts from an
• Performance of services which constitute business
interest in a partnership, S-corporation or LLC.
activity.
Property Factor
• Rental, leasing, licensing, or use of tangible or intangible
The property factor is equal to the average value of all real
property which constitutes business activity.
and tangible personal property owned or rented in Michigan
Sales do not include dividends, interest, and royalties
divided by the average value of all property owned or rented
received by the taxpayer to the extent deducted from the
everywhere, multiplied by the weighted factor. Tangible
taxpayer's tax base. For tax years beginning after
personal property includes machinery, tools, inventory,
12/31/2000, sales also do not include royalties not deducted
implements, equipment, goods, wares and merchandising.
from the tax base if they are paid to a franchisor as
Real property includes land, buildings, leasehold
consideration for use outside the state of trade names,
improvements and construction in progress.
trademarks, and similar tangible property.
Determine the average value of your property by
The sales factor is equal to total sales in Michigan divided by
averaging the values at the start and end of the tax period.
the total sales everywhere, multiplied by a weighted factor.
Value property you own at its original cost.
Value property you rent at eight times the net annual
Sales of tangible personal property are attributable to
rental rate, which is the annual rental rate paid less any
Michigan if the property is shipped or delivered to any
purchaser within Michigan regardless of the free on board
rental rate received from subrentals.
(F.O.B.) point or other conditions of the sales.
The factor is computed by dividing the total value of your
Michigan property (line 5) by the value of all your property
Sales other than the sale of tangible personal property
are attributable to Michigan if:
(line 8).
Payroll Factor
• The business activity is performed in Michigan;
Payroll consists of wages paid during the tax year. The
• The business activity is performed both in Michigan and in
payroll factor is equal to total wages paid in Michigan divided
other states, but based on the cost of performance, a
by the total wages paid everywhere, multiplied by the
greater proportion is performed in Michigan; or
weighted factor.
• Receipts are derived from services performed for planning,
designing, or construction activities within Michigan.
For purposes of apportionment only, wages means wages
as defined in IRC Section 3401.
The factor is computed by dividing the total Michigan sales
Wages are considered paid in Michigan if:
on line 13 by the total sales everywhere on line 14.
1. The employee's service is performed entirely in Michigan;
2. The employee's service is performed in Michigan and in
Example 1
other states, but the service performed outside Michigan
Factor
Column A
Column B
Column C
is incidental to the employee's service in Michigan;
Property
10%
x
3.75%
=
0.375%
3. Some of the employee's service is performed in Michigan
Payroll
10%
x
3.75%
=
0.375%
and the base of operations or the place from which the
Sales
50%
x
92.5%
=
46.25%
service is controlled is in Michigan; or
47%
4. The base of operations or place from which the service is
The apportionment percentage is 47%. Enter this
controlled is not in any state in which some part of the
percentage on line 16.
service is performed, but the individual's residence is in
Michigan.
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