Instructions For Form 4567 - Michigan Business Tax Annual Return (Page 4 of 11) in pdf

section of these instructions to determine Michigan sales. If

Public Act (PA) 282 of 2014 modified the definition of

sales reported are adjusted by a deduction for qualified sales to

gross receipts. For 2014 forms, this change is represented

a qualified customer, as determined by the Michigan Economic

by the insertion of new line 64b of Worksheet 4700.

Growth Authority (MEGA), attach the Anchor District Tax

Credit Certificate or Anchor Jobs Tax Credit Certificate from

the Michigan Economic Development Corporation (MEDC) as

Attach the worksheet to the return. Gross receipts are not

support.

necessarily derived from the federal return, however, the

For sales from the performance of services, see RAB 2010-5,

worksheet will calculate gross receipts as defined by law in

“Michigan Business Tax Where Benefit of Services is Received,”

most instances. Taxpayers and tax professionals are expected to

on the Treasury Web site at ,

be familiar with uncommon situations within their experience,

under “Reports and Legal Resources.”

which produce gross receipts not identified by specific lines

on Worksheet 4700, and report that amount on the most

For transportation services that source sales based on revenue

appropriate line. Treasury may adjust the figure resulting

miles, enter a sales amount on Line 11a by multiplying total

from the worksheet to account properly for such uncommon

sales of the transportation service by the ratio of Michigan

situations.

revenue miles over revenue miles everywhere as provided

in the “Sourcing of Sales to Michigan” chart for that type of

A taxpayer should compute its gross receipts using the same

transportation service. Revenue mile means the transportation

accounting method used in the computation of its net income

for a consideration of one net ton in weight or one passenger

for federal income tax purposes.

the distance of one mile.

Producers of Agricultural Goods: The total gross receipts

NOTE: Only transportation services are sourced using revenue

from all business activity must be reported on line 12,

miles. To the extent the taxpayer has business activities or

including the gross receipts from agricultural activity of a

revenue streams not from transportation services, those

person whose primary activity is the production of agricultural

receipts should be sourced accordingly.

goods. A subtraction is allowed on line 21 for the gross

receipts that have been included on this line that are from the

PART 1: MODIFIED GROSS RECEIPTS TAX

agricultural activity of a person whose primary activity is the

Line 12: Gross receipts means the entire amount received by

production of agricultural goods.

the taxpayer, as determined by using the taxpayer’s method of

accounting for federal income tax purposes, from any activity,

Producers of Oil or Gas, and Minerals: The total gross

whether in intrastate, interstate, or foreign commerce, carried out

receipts from all business activity must be reported on line 12,

for direct or indirect gain, benefit or advantage to the taxpayer or

including the gross receipts from the production of oil and gas

to others, with certain exceptions.

even if this activity is subject to the Severance Tax on Oil or

Calculation of gross receipts also involves a deduction of any

Gas, and Minerals, 1929 PA 48. A subtraction is allowed on

amount deducted as bad debt for federal income tax purposes

line 21 for the gross receipts that have been included on this

that corresponds to items of gross receipts included in the

line that are from the production of oil and gas that are subject

modified gross receipts tax base for the current tax year or

to the Severance Tax on Oil or Gas, and Minerals.

past tax years. This reduction is reflected in the Gross Receipts

Line 13: Enter inventory acquired during the tax year,

Worksheet (Worksheet 4700) discussed below. Receipts include,

including freight, shipping, delivery, or engineering charges

but are not limited to:

included in the original contract price for that inventory, and

• Some or all receipts (sales proceeds) from the sale of assets

any pre-paid sales tax required to be paid on the inventory at the

used in a business activity.

time of purchase. Neither pre-paid sales tax, nor the sales tax

collected upon resale of that inventory is excluded from gross

• Sale of products.

receipts calculated on Worksheet 4700. This must be reported

• Services performed.

on line 12 of Form 4567.

• Gratuities stipulated on a bill.

Inventory means the stock of goods, including electricity and

• Sales tax collected on the sale of tangible personal property,

natural gas, held for resale in the ordinary course of a retail

subject to a phase-out schedule.

or wholesale business, and finished goods, goods in process

• Dividend and interest income.

of a manufacturer, and raw materials purchased from another

• Gross commissions earned.

person. Inventory also includes shipping and engineering

• Rents.

charges so long as such charges are included in the original

contract price for the associated inventory and floor plan

• Royalties.

interest for licensed new car dealers.

• Sales of scrap and other similar items.

For purposes of this deduction, floor plan interest means

• Client reimbursed expenses not obtained in an agency capacity.

interest paid that finances any part of the person’s purchase of

• Gross proceeds from sales between affiliated companies,

new motor vehicle inventory from a manufacturer, distributor,

including members of a UBG.

or supplier. However, amounts attributable to any invoiced

Use Worksheet 4700, in Form 4600, to calculate gross receipts.

items used to provide more favorable floor plan assistance to

a person subject to the tax imposed under this act than to a

Instructions For Form 4567 - Michigan Business Tax Annual Return Page 4

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