Form 4580 - Michigan Business Tax Unitary Business Group Combined Filing Schedule For Standard Members - 2012 Page 11
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19accounting for federal income tax purposes, from any activity,
person. Inventory includes shipping and engineering charges
whether in intrastate, interstate, or foreign commerce, carried
so long as such charges are included in the original contract
out for direct or indirect gain, benefit, or advantage to the
price for the associated inventory. Inventory also includes
member or to others, with certain exceptions. Receipts include,
floor plan interest for new motor vehicle dealers licensed
under the Michigan vehicle code and any pre-paid sales tax
but are not limited to:
required to be paid on the inventory at the time of purchase.
• Some or all receipts (sales proceeds) from the sale of assets
For purposes of this deduction, floor plan interest means interest
used in a business activity.
paid that finances any part of the person’s purchase of new motor
• Sale of products.
vehicle inventory from a manufacturer, distributor, or supplier.
• Services performed.
However, amounts attributable to any invoiced items used to
• Gratuities stipulated on a bill.
provide more favorable floor plan assistance to a person subject
• Dividend and interest income.
to the tax imposed under the MBT Act than to a person not
• Gross commissions earned.
subject to this tax is considered interest paid by a manufacturer,
distributor, or supplier, and is not considered floor plan interest.
• Rents.
• Royalties.
For a person that is a securities trader, broker, or dealer, or a
• Sales of scrap and other similar items.
person included in the UBG of that securities trader, broker,
or dealer that buys and sells for its own account, inventory
• Client reimbursed expenses not obtained in an agency
includes contracts that are subject to the Commodity Exchange
capacity.
Act, 7 USC 1 to 27f, the cost of securities as defined under IRC
• Gross proceeds from sales between affiliated companies,
§ 475(c)(2) and for a securities trader the cost of commodities
including members of a UBG.
as defined under IRC § 475(e)(2) and for a broker or dealer the
cost of commodities as defined under IRC § 475(e)(2)(b), (c),
Use Worksheet 4700 in Form 4600 to calculate gross receipts.
Attach the worksheet to the return. Gross receipts are not
and (d), excluding interest expense other than interest expense
necessarily derived from the federal return, however, the
related to repurchase agreements. As used in this provision:
worksheet will calculate gross receipts as defined by law in most
• Broker and dealer mean those terms as defined under
circumstances. Taxpayers and tax professionals are expected to
section 78c(a)(4) and (a)(5) of the Securities Exchange Act of
be familiar with uncommon situations within their experience,
1934, 15 USC 78c.
which produce gross receipts not identified by specific lines on
• Securities trader means a person that engages in the trade
Worksheet 4700, and report that amount on the most appropriate
or business of purchasing and selling investments and trading
line. Treasury may adjust the figure resulting from the worksheet
assets.
to account properly for such uncommon situations.
Inventory does not include either of the following:
A member should compute its gross receipts using the same
accounting method used in the computation of its taxable
• Personal property under lease or principally intended for
income for federal income tax purposes.
lease rather than sale.
Producers of Agricultural Goods: The total gross receipts
• Property allowed a deduction or allowance for depreciation
from all business activity must be reported on line 17,
or depletion under the IRC.
including the gross receipts from agricultural activity of a
person whose primary activity is the production of agricultural
Line 19: Enter assets, including the costs of fabrication
goods. A subtraction is allowed on line 26 for the gross
and installation, acquired during the tax year of a type that
are, or under the IRC will become, eligible for depreciation,
receipts that have been included on this line that are from the
amortization, or accelerated capital cost recovery for federal
agricultural activity of a person whose primary activity is the
income tax purposes.
production of agricultural goods.
Line 20: To the extent not included in inventory or depreciable
Producers of Oil and Gas: The total gross receipts from all
property, enter the value of materials and supplies, including
business activity must be reported on line 17, including the
gross receipts from the production of oil and gas even if this
repair parts and fuel.
activity is subject to the Severance Tax on Oil or Gas, 1929
Materials and supplies means tangible personal property
PA 48. A subtraction is allowed on line 26 for the gross
acquired during the tax year to be used or consumed in, and
receipts that have been included on this line that are from the
directly connected to, the production or management of inventory
production of oil and gas that are subject to the Severance Tax
or the operation or maintenance of depreciable assets. Materials
on Oil or Gas.
and supplies includes repair parts and fuel.
Line 18: Enter inventory acquired during the tax year,
For example, a physician’s or dentist’s purchase of sterilizing
including freight, shipping, delivery, or engineering charges
solution during the tax year that is used to sterilize examination
included in the original contract price for that inventory.
equipment, such as an X-ray machine, may be considered
materials and supplies under MCL 208.1113(6)(c).
Inventory means the stock of goods, including electricity and
natural gas, held for resale in the ordinary course of a retail
Line 21: A staffing company may deduct compensation
or wholesale business, and finished goods, goods in process
(including wages, benefits, and all payroll taxes) paid to personnel
of a manufacturer, and raw materials purchased from another
115
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