Form 4891 - Michigan Corporate Income Tax Annual Return

activities.

made at the taxpayer level. If the taxpayer at issue is a UBG,

the ownership requirement will be made at the UBG level. So,

Complete the Apportionment Calculation using amounts for

if the combined ownership of the FTE by the UBG is greater

the taxpayer’s business activity only. Do not include amounts

than 50%, then the ownership requirement will be satisfied.

received from an interest in a Partnership, S Corporation, or

NOTE: PA 266 of 2013 authorizes an affiliated group

LLC.

election that applies an alternate test for finding a unitary

Use the information in the “Sourcing of Sales to Michigan”

relationship between corporations. This act DID NOT create

section of the general instructions in Form 4890.

a corresponding “affiliated group” test for finding a unitary

Line 9a: Enter the Michigan sales that are directly attributable

relationship between a corporation and an FTE. The existence

to the taxpayer.

of a unitary relationship between a corporation and an FTE is

still based exclusively on the test described above

Transportation services that source sales based on revenue

Line 9b: If the taxpayer is unitary with an FTE or FTEs, enter

miles: Enter on this line the taxpayer’s total sales multiplied

on this line the total proportionate amount of Michigan sales

by the ratio of Michigan revenue miles over revenue miles

attributed to these flow-through entities in column J on Form

everywhere as provided in the “Sourcing of Sales to Michigan”

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

chart for that type of transportation service. Revenue mile

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

means the transportation for consideration of one net ton in

completed and included with the filing of this form.

weight or one passenger the distance of one mile.

UBGs: Enter on this line the entire amount of total Michigan

NOTE: Only transportation services are sourced using revenue

sales attributed to all flow-through entities that are unitary with

miles. To the extent the taxpayer has business activities or

a member of the group. For each member of the group, add the

revenue streams not from transportation services, those

figure reported on Form 4897, line 14, of all members of the

receipts should be sourced accordingly.

group, and enter the sum here.

UBGs: Enter on this line the entire amount of Michigan sales

Line 9d: Enter the total sales that are directly attributable to

of all members in the group after eliminations. For more

the taxpayer.

information see the instructions for Form 4897. Note that

apportionment is calculated on a member by member basis.

Transportation services that source sales based on revenue

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

For each member reported on Form 4897, calculate the

attributable to the taxpayer.

member’s Michigan sales as follows: from the figure reported

on Form 4897, line 13, subtract the amount reported on Form

NOTE: Only transportation services are sourced using revenue

4897, line 15. Add the calculated Michigan sales amount of all

miles. To the extent the taxpayer has business activities or

members of the group, and enter the total sum here.

revenue streams not from transportation services, those

receipts should be sourced accordingly.

Taxpayers that have a unitary relationship with a Flow-

Through Entity (FTE), but are not part of a CIT unitary

UBGs: Enter on this line the entire amount of total sales of all

group of corporations (i.e., line 7a is not checked): Do not

members in the group after eliminations. For more information

include on this line Michigan sales made by the taxpayer to

see the instructions for Form 4897. For each member reported

an FTE that is unitary with the taxpayer and is included on

on Form 4897, calculate the member’s total sales as follows:

FTEs that are Unitary with the Taxpayer (Form 4900). In other

from the figure reported on Form 4897, line 16, subtract the

words, enter this line net of eliminations with the FTE. For

amount on Form 4897, line 18. Add the calculated total sales

more information on eliminations, see the instructions to line

amount of all members of the group, and enter the total sum

17.

here.

An FTE is an entity that, for the applicable tax year, is treated

Taxpayers that have a unitary relationship with an FTE,

as a subchapter S Corporation under section 1362(a) of the

but are not part of a CIT unitary group of corporations

internal revenue code, a general partnership, a trust, a limited

(i.e., line 7a is not checked): Do not include on this line

partnership, a limited liability partnership, or a limited liability

sales made by the taxpayer to an FTE that is unitary with

company that is not taxed as a C Corporation for federal

the taxpayer and is included in Form 4900. In other words,

income tax purposes.

enter this line net of eliminations with the FTE. For more

information on eliminations, see the instructions to line 17.

A taxpayer is unitary with a flow-through entity if the taxpayer:

Line 9e: If the taxpayer is unitary with an FTE or FTEs,

• Owns or controls, directly or indirectly, more than 50% of the

enter on this line the total proportionate amount of total sales

ownership interests with voting rights (or ownership interests

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

that confer comparable rights to voting rights) of the FTE; AND

information see the instructions for Form 4900. If an amount

• The taxpayer and FTE have activities or operations which

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

result in a flow of value between the taxpayer and the FTE, or

included with the filing of this form.

between the FTE and another FTE unitary with the taxpayer,

UBGs: Enter on this line the entire amount of total sales

or has business activities or operations that are integrated

attributed to all flow-through entities that are unitary with a

with, are dependant upon, or contribute to each other. The

member of the group. Add the figure reported on Form 4897,

determination of whether a taxpayer is unitary with an FTE is

Form 4891 - Michigan Corporate Income Tax Annual Return - 2014 Page 6

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