Instructions For C-8009 - Allocation Of Statutory Exemption, Standard Small Business Credit And Alternate Tax For Members Of Controlled Groups - 2006
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3Instructions for C-8009,
Allocation of Statutory Exemption, Standard Small Business Credit
and Alternate Tax for Members of Controlled Groups
Purpose: To supplement Form C-8000C, SBT Credit
shareholders, has allocated income after loss
for Small Businesses and Contribution Credits, and
adjustment of more than $115,000 from any one
Form C-8043, SBT Statutory Exemption Schedule, for
member of the group, the group is not eligible for the
members of controlled groups.
credit.
All controlled groups, including affiliated groups,
Note: For purposes of computing the statutory
controlled groups of corporations and entities under
exemption and the small business credit, a member of
common control, must complete this schedule to
an LLC is treated as a partner if the LLC is taxed as a
allocate the statutory exemption and calculate the
partnership. For purposes of computing the statutory
standard small business credit or alternate tax.
exemption only, a member of an LLC is treated as a
shareholder if the LLC is taxed as a corporation.
Controlled groups are affiliated groups of corporations
For the purpose of computing the small business
as defined in the SBT Act or controlled groups of
credit, a member of an LLC with officer-like duties
corporations as defined in the IRC, Section 1563.
is treated as an officer if the LLC is taxed as a
An affiliated group is two or more corporations, one of
corporation.
which owns or controls, directly or indirectly, 80
If claiming either the alternate credit or the standard
percent or more of the capital stock of the other
small business credit, each member must calculate its tax
corporation(s) with voting rights.
before credits on Form C-8000, SBT Annual Return.
Entities under common control are two or more trades
Note: If a taxpayer is a member of an affiliated group,
or businesses, whether or not incorporated, under
a controlled group of corporations or an entity under
common control as defined in the IRS Regulation
1.414(c). This includes parent-subsidiary, brother-sister
common control, the group must sum its members’
or combined groups of corporations. See RAB 1989-48
apportioned or allocated gross receipts on Form
for further information.
C-8010AGR, SBT Adjusted Gross Receipts for
An entity must be included in a controlled group if it
Controlled Groups, to determine if members of the
was a member of the group for at least one half of the
group need to file. For this purpose, do not include
days of the entity’s taxable year.
members whose apportioned or allocated gross
receipts are less than $100,000, as these members are
Exception: Groups of corporations that have
not required to file an SBT return. However, members
received approval and are filing a consolidated SBT
whose apportioned or allocated gross receipts are less
annual return do not need to file this schedule unless
than $100,000 must include their business activity
there are members of the controlled group not
when figuring the small business credit on Form
included in the consolidated filing.
C-8009. For these members, report “Tax After
If the group files a consolidated SBT return, compute
Investment Tax Credit” on lines 12 and 22 as zero.
the small business credit or alternate tax on a
Attach a copy of this schedule to each member’s
consolidated basis using Form C-8000C.
Form C-8000 claiming a statutory exemption,
Controlled groups, as defined in the IRC, are not
standard small business credit or alternate tax.
eligible for the standard small business credit or
All members must choose the same credit calculation,
alternate tax unless the business activities of the entities
either standard or alternate.
are consolidated, whether or not a consolidated SBT
return is filed. This means the gross receipts, adjusted
Small Business Credit Eligibility
business income and tax base of all members of the
The standard small business credit and the alternate tax
group must be combined to determine eligibility and to
are not available to members of a controlled group if any
compute this credit.
of the following conditions exist:
Only members who have no activity in Michigan are
• Combined gross receipts on line 11, column d, are
excluded from this calculation.
over $10 million.
If the combined gross receipts exceed $10 million or the
• Combined adjusted business income on line 10,
combined adjusted business income after loss
column d, minus loss adjustment, are over
adjustment exceeds $475,000, or any one individual,
$475,000.
partner, officer or shareholder, including corporate
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