Michigan Tax Amnesty And Tax Returns Guide And Instructons Page 22
ADVERTISEMENT
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
38
39
40
41INSTRUCTIONS FOR C-8000H
APPORTIONMENT FORMULA
Purpose: To determine the portion of your tax base
The factor is computed by dividing the total value of your
attributable to Michigan for a taxpayer whose business
Michigan property on line 5 by the total value of all your
activity is subject to tax both within and without Michigan.
property on line 8.
A filer is subject to tax in another state if in that state, the
Payroll Factor
filer is subject to a business privilege tax, a net income tax, a
Payroll consists of wages paid during the tax year.
franchise tax measured by net income, a franchise tax for the
The payroll factor is equal to total wages paid in Michigan
privilege of doing business, a corporation stock tax, or a tax
divided by the total wages paid everywhere, multiplied by
of the type imposed under the Michigan SBT Act, or that
the weighted factor. Total payroll should equal the
state has jurisdiction to subject the filer to one or more of the
amount you entered on Form C-8000, line 12.
taxes regardless of whether the tax is imposed. A taxpayer
For purposes of apportionment only, wages means wages
will be subject to a tax in another state if the taxpayer has
as defined in IRC Section 3401.
Due Process and Commerce Clause nexus with that state.
Wages are considered paid in Michigan if:
GENERAL INSTRUCTIONS
1. the employee’s service is performed entirely in Michigan;
Your Michigan tax is based only on the business activity
2. the employee’s service is performed in Michigan and in
you conduct in Michigan. This activity is measured by three
other states, but the service performed outside Michigan
factors: property, payroll and sales.
is incidental to the employee’s service in Michigan;
Each factor is weighted; the weighted figures are then
3. some of the employee’s service is performed in Michigan
added to determine the portion of activity taxable in
and the base of operations or the place from which the
Michigan. The property and payroll factors are weighted at 5
service is controlled is in Michigan; or
percent and the sales factor is weighted at 90 percent. See
4. the base of operations or place from which the service is
example 1 on page 36. There are different formulas for
controlled is not in any state in which some part of the
transportation companies, financial organizations and other
service is performed, but the individual’s residence is in
authorized taxpayers. See "Formulas for Special Situations"
Michigan.
on page 36.
The factor is computed by dividing the wages paid in
Carry all percentages to six decimal places. Do not round
Michigan during the tax year on line 10 by the total wages
percentages. For example, 24.154256 becomes 24.1542
paid everywhere on line 11.
percent (.241542).
Sales Factor
Complete the apportionment schedule using amounts for
Sales include the amounts received by the taxpayer as
your business activity only. Do not include amounts from an
consideration from the following:
interest in a partnership, S-corporation or LLC.
•
The transfer of title to, or possession of, property that
Property Factor
is stock in trade or other property of a kind which
The property factor is equal to the average value of all real
would properly be included in the inventory of the
and tangible personal property owned or rented in Michigan
taxpayer if on hand at the close of the tax period, or
divided by the average value of all property owned or rented
property held by the taxpayer primarily for sale to
everywhere, multiplied by the weighted factor. Tangible
customers in the ordinary course of its trade or
personal property includes machinery, tools, inventory,
business.
implements, equipment, goods, wares and merchandise.
•
Performance of services which constitute business
Real property includes land, buildings, leasehold
activity.
improvements and construction in progress.
•
Rental, leasing, licensing, or use of tangible or
Determine the average value of your property by
intangible property which constitutes business
averaging the values at the start and end of the tax period.
activity.
The Commissioner of Revenue may require the periodic
Sales do not include dividends, interest, and royalties
averaging of values during the tax year if reasonably
received by the taxpayer to the extent deducted from the
required to reflect properly the average value of a taxpayer’s
taxpayer's tax base. For tax years beginning after
property.
12/31/2000, sales also do not include royalties not deducted
Value property you own at its original cost.
from the tax base if they are paid to a franchisor as
Value property you rent at eight times the net annual
consideration for the use outside the state of trade names,
rental rate, which is the annual rental rate paid less any
trademarks and similar intangible property
.
rental rate received from subrentals.
35
ADVERTISEMENT
0 votes
Related Articles
Related forms
Related Categories
Parent category: Financial