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Complete this line using amounts for the member’s business

Transportation services that source sales based on revenue

activity only. Do not include amounts from an interest owned

miles: Include on this line the total sales that are directly

by a member in a Partnership or S Corporation (or LLC taxed

attributable to the taxpayer.

federally as such).

Line 17: If the taxpayer is unitary with an FTE or FTEs,

enter on this line the total proportionate amount of total sales

Transportation services that source sales based on revenue miles:

attributed to these FTEs in column O on Form 4900. For more

Include on this line the taxpayer’s total sales of transportation

information see the instructions for Form 4900. If an amount

services multiplied by the ratio of Michigan revenue miles over

is entered on this line, then Form 4900 must be completed and

revenue miles everywhere as provided in the “Sourcing of Sales

included with the filing of this form.

to Michigan” chart for that type of transportation service.

Line 18: Enter on this line total sales made between the

NOTE: Only transportation services are sourced using

member and another member of the UBG, and sales from the

revenue miles. To the extent a member has business activities

member to an FTE that is unitary with the UBG and is included

or revenue streams not from transportation services, those

in Form 4900.

receipts should be apportioned accordingly. Apportionment,

including transportation services, is calculated on a member by

Line 19a: Gross receipts means the entire amount received by

member basis.

the member from any activity, whether in intrastate, interstate,

Revenue mile means the transportation for consideration of one

or foreign commerce, carried out for direct or indirect gain,

benefit, or advantage to the member or to others, with certain

net ton in weight or one passenger the distance of one mile.

exceptions. See the Gross Receipts Checklist in the instructions

Line 14: If the taxpayer is unitary with a flow-through entity

for Form 4891, line 10, for further guidance.

(FTE) or FTEs, enter on this line the total proportionate amount

A member should compute its gross receipts using the same

of Michigan sales attributed to these FTEs in column J on Form

accounting method used in computing its taxable income for

4900. For more information see the instructions for Form 4900.

federal income tax purposes. Gross receipts of a member of a

If an amount is entered on this line, then Form 4900 must be

completed and included with the filing of this form.

UBG is reported here before eliminations. Do not include in

this figure gross receipts imputed to this member from activity

NOTE: PA 266 of 2013 authorizes an affiliated group

of an FTE.

election that applies an alternate test for finding a unitary

Line 19b: Enter on this line all gross receipts 1) received by

relationship between corporations. This act DID NOT create

a corresponding “affiliated group” test for finding a unitary

this member from another member of the UBG, or 2) received

by this member from an FTE that is unitary with the UBG and

relationship between a corporation and an FTE. The existence of

is not filing Michigan Business Tax (MBT) for this tax period.

a unitary relationship between a corporation and an FTE is still

Lines 21 through 26: Business income means federal taxable

based exclusively on the traditional two-part test described in the

income. Federal taxable income, as reported on line 21, is

instructions for line 9 of Form 4891.

defined for CIT purposes to include carryback and carryover

Line 15: Enter on this line all Michigan sales made between

of federal net operating losses. Note that these amounts will

the member and another member of the UBG, and sales from

be added back, for CIT purposes, in the Additions to Business

the member to an FTE that is unitary with the UBG and is

Income section (lines 27 through 31) of this form.

included in Form 4900.

See the discussion of PA 233 of 2013 in the “Important

NOTE: Elimination, where required, applies to transactions

Information for 2014” section of the general instructions.

between any members of the UBG — not just members that

For a tax-exempt taxpayer, business income means only that

report on the standard taxpayer combined return supported by

part of federal taxable income (as defined for CIT purposes)

this form. For example, if the UBG includes standard taxpayers

(not owned by and unitary with a financial institution in the

derived from unrelated business activity.

UBG), an insurance company, and two financial institutions

IMPORTANT: As long as one member of a UBG has nexus

with nexus, transactions between a standard taxpayer member

and an insurance or financial member are eliminated whenever

with Michigan and exceeds the protections of PL 86-272, all

members of the UBG, including members protected under

elimination is required, despite the fact that the insurance and

financial members are not reported on the combined return

PL 86-272, must be included when calculating the UBG’s

filed by standard taxpayer members.

Corporate Income Tax base and apportionment formula. (In

other words, PL 86-272 will only remove business income

However, there is no elimination with an otherwise related

from the apportionable Corporate Income Tax base when all

entity if the related entity is excluded from the UBG. For

members of the UBG are protected under PL 86-272.) The

example, consider a group with a U.S. parent, a U.S. subsidiary,

inclusion of the business income of members that fall under

and a foreign operating entity subsidiary that would otherwise

PL 86-272 in the tax base of the UBG and the subsequent

be a UBG, but the foreign operating entity is excluded from the

apportionment of such income does not constitute taxation

UBG by definition. The U.S. parent filing a UBG return may

upon those PL 86-272 members. Rather, this method is

not eliminate intercompany transactions between itself and the

required for properly determining the Michigan income of the

foreign operating entity.

UBG.

Line 16: Enter the total sales that are directly attributable to

this member.

Form 4897 - Michigan Corporate Income Tax Data On Unitary Business Group Members - 2014 Page 5

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