Form 4580 - Michigan Business Tax Unitary Business Group Combined Filing Schedule For Standard Members - 2012 Page 7
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19Instructions for Form 4580
Michigan Business Tax (MBT) Unitary Business Group
Combined Filing Schedule for Standard Members
A taxpayer need only meet one of the two alternative tests to
Purpose
satisfy the relationship test.
The purpose of this form is to:
1) Flow of value is established when members of the
• Identify all members of a Unitary Business Group (UBG)
group demonstrate one or more of functional integration,
• Gather tax return data for each standard member included
centralized management, and economies of scale. Examples
of functional integration include common programs or
in the combined return on a separate basis, make appropriate
systems and shared information or property. Examples of
eliminations, and determine combined UBG data for the tax
centralized management include common management or
return.
directors, shared staff functions, and business decisions
NOTE: This is not the primary return. It is designed to support
made for the UBG rather than separately by each member.
the MBT Annual Return (Form 4567) submitted on behalf of
Examples of economies of scale include centralized business
the UBG by the Designated Member (DM).
functions and pooled benefits or insurance. Groups that
commonly exhibit a flow of value include vertically or
Refund Only: If combined apportioned or allocated gross
horizontally integrated businesses, conglomerates, parent
receipts of all members (before eliminations) is less than
companies with their wholly owned subsidiaries, and entities
$350,000 and the taxpayer is filing Form 4567 solely to claim
in the same general line of business. Flow of value must be
a refund of estimates paid, Form 4580 must also be included.
more than the mere flow of funds arising out of passive
The designated member must complete Part 1A, Part 2B (skip
investment.
lines 18 through 65), Part 3, and Part 4 of Form 4580. For each
member listed in Part 1A, complete Part 1B and 2A (skip lines
2) The alternate contribution/dependency relationship test
18 through 65). See Form 4567 for instructions on completing
asks whether business activities are integrated with, dependent
that form.
upon, or contributed to each other. Businesses are integrated
with, are dependent upon, or contribute to each other under
Fiscal Year Filers: See “Supplemental Instructions for
many of the same circumstances that establish flow of value.
Standard Fiscal MBT Filers” in the MBT Forms and
However, this alternate relationship test is also commonly
Instructions for Standard Taxpayers (Form 4600).
satisfied when one entity finances the operations of another
or when there exist intercompany transactions, including
General Information About UBGs in MBT
financing.
Unitary Business Group means a group of United States
For more information on the control and relationship tests
persons, other than a foreign operating entity, that satisfies the
for UBGs, see Revenue Administrative Bulletin (RAB)
control test and relationship test.
2010-1, MBT—Unitary Business Group Control Test, and
RAB 2010-2, MBT—Unitary Business Group Relationship
United States person is defined in Internal Revenue Code (IRC)
§ 7701(a)(30). A foreign operating entity is defined by statute in
Tests, on the Department of Treasury (Treasury) Web site at
Michigan Compiled Laws (MCL) 208.1109(5).
(Click on the “Reference Library”
link on the left side of the page.)
Control Test. The control test is satisfied when one person
owns or controls, directly or indirectly, more than 50 percent
Filing Procedures for UBGs
of the ownership interest with voting or comparable rights of
By definition, a UBG can include standard taxpayers,
the other person or persons. A person owns or controls more
insurance companies, and financial institutions. (Note that an
than 50 percent of the ownership interest with voting rights
entity that would otherwise be standard but is owned by and
or ownership interest that confer comparable rights to voting
unitary with a financial institution is defined by statute to be a
rights of another person if that person owns or controls:
financial institution.) In some cases, however, not all members
• More than 50 percent of the total combined voting power of
of the UBG will be included on the same return. Standard
all ownership interests with voting (or comparable) rights, or
members (not owned by and unitary with a financial institution
• More than 50 percent of the total value of all ownership
in the UBG) file a combined return on Form 4567. Form 4580
interests with voting (or comparable) rights.
must be filed in support of that return.
Relationship Tests. The definition of a Unitary Business Group
Form 4580 is used to gather and combine data from each
requires that the group of persons have business activities or
standard member of the UBG to support the group’s Form
operations that either:
4567 and related forms. This form must be completed before
the group’s Form 4567 and related forms are completed. If
1) Result in a flow of value between or among persons in the
this UBG also includes financial institutions and/or insurance
group, or
companies, those members generally will not report tax data on
2) Are integrated with, dependent upon, or contribute to each
this form, but will be listed as excluded affiliates in Part 3.
other.
Financial institution members will report and combine their
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