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Michigan Business Tax Estimator

IMPORTANT INFORMATION

 
     
 

Except as noted below, the estimator works for firms who file SBT form C-8044 or C-8000. Businesses that did not file an SBT return, or gross receipts short filers (who pay tax on ½ of gross receipts but do not complete form C-8000), will have to estimate the amounts requested from lines on SBT forms.

This estimator provides an unofficial estimate and has no legal bearing on any future tax liability. The estimator is a secure, encrypted site and does not track the user’s identity and none of the data is retained.

You may estimate your annual Michigan Business Tax (MBT) liability using either 2008 or 2009 tax law. The compensation, ITC, and R & D credits are reduced for 2008. There is no NOL deduction for 2008. The gross receipts tax base subtraction for an unused SBT business loss is available only for 2008.

Firms with apportioned gross receipts under $350,000 are exempt from the Michigan Business Tax (MBT) but may be eligible for a refundable property tax credit or other refundable credit.

If you sell to customers outside Michigan, you may be able to apportion your MBT tax base even if you cannot apportion your SBT tax base. On this estimator's Data Entry page, read the links to "Are you a MultiState Firm?" and "Michigan sales".

A unitary business group must file a combined Michigan Business Tax (MBT) return that includes all firms other than foreign operating entities. All transactions between members of the group are eliminated from the business income tax base, the modified gross receipts tax base, and the apportionment formula. A unitary business group using this estimator must combine the required data for all members of the group.

Concerning the Alternate Tax only:

  • If you file form C-8044, enter C-8044 line 8, Gross Receipts, on the line labeled C-8000 line 10, Gross Receipts; enter C-8044 line 12, Adjusted Business Income, on the line labeled C-8000C line 9; enter C-8044 line 15, Tax After Nonrefundable Credits, on the line labeled C-8000 line 44; and enter C-8044 line 19, Refundable Credits, on the line labeled C-8000MC line 17. Check “Yes” for the question, “Are you Eligible for the Small Business Credit/Alternate Tax?”.

  • Firms not eligible for the SBT alternate tax credit may be eligible for the MBT credit as a result of the increased income and gross receipts limits. Users will have to calculate their adjusted business income (ABI) and the highest share of ABI to any one owner. If your gross receipts are under $20 million, if total adjusted business income (ABI) is under $1.3 million, and no owner’s or officer’s compensation or share of ABI is $180,000 or more, you qualify for the credit.

  • The estimator does not reflect changes for limited liability companies filing as a C corporation.

  • The estimator does not reflect changes for businesses that are part of a unitary business group. Users will have to determine whether the group is eligible for the alternate tax credit

Concerning the MBT Investment Tax Credit (ITC) and Recapture of SBT ITC

Total Michigan Capital Investment must be reduced when Michigan assets for which an SBT ITC was claimed (2000 – 2007) are sold or moved out of Michigan in the tax year. The reduction is required only to the extent the SBT ITC was used and is at the rate the credit was used. Since the SBT ITC was at a rate less than the MBT ITC, only a percentage of the adjusted federal basis of SBT ITC assets sold or moved is subtracted from Total Michigan Capital Investment. For example, for an asset generating a 2006 SBT ITC, the percentage is calculated by dividing 2006 C-8000ITC line 31 by 2006 C-8000ITC line 24, and then, for 2008, dividing the result by 2.32%, or after 2008, by 2.9% (the MBT ITC rate). The percentage is further reduced to the extent the credit was carried forward and not used.

SBT ITC Recapture Detailed Example.

Note that for the 2009 tax year, Total Michigan investment is also reduced by the federal adjusted basis of assets sold or moved out of Michigan in the 2009 tax year that were either purchased in the 2008 tax year and located in Michigan or moved into Michigan in the 2008 tax year. A reduction will also be made for apportioned mobile tangible assets purchased in the 2008 tax year and sold in the 2009 tax year.

Concerning personal property tax cuts under the Michigan Business Tax (MBT)

  • Laws tied to the MBT exempt industrial personal property from the six-mill state education tax (SET) and from the 18-mill local school district (K-12) operating tax. The MBT provides firms a 35% credit for the non-exempt industrial personal property taxes paid.

  • Commercial personal property is exempt from 12 mills of the 18 mills (2/3) of school district operating tax. If your firm pays local school district operating taxes on commercial personal property at a rate less than 18 mills, your firm will receive an exemption greater than the 2/3 assumed by the estimator.

  • If you provide the amount of local school district operating property tax, and the state education tax, paid on industrial and commercial personal property, the estimator will accurately calculate the savings from the personal property tax exemption, except as noted above and in the next bullet. Otherwise, the estimator will assume the exemption cuts personal property taxes by 46% on industrial personal property and 23% on commercial personal property.

    If your firm’s average weighted millage rate is higher than 52.17 mills, the state average, your firm’s property tax savings will be less than our estimate. On the other hand, if your firm’s average weighted millage rate is less than 52.17 mills, your firm’s property tax savings will be higher than our estimate.

  • The personal property tax exemptions will be reduced in hold-harmless school districts, i.e. those districts that reduce the 18-mill homestead exemption to generate the portion of their foundation allowance above the maximum state guarantee.

    If you own personal property in a hold-harmless school district, the estimator will overstate your property tax cut. The personal property tax exemptions will be reduced in hold-harmless school districts because those districts reduce the 18-mill school operating exemption to generate the portion of their foundation allowance above the maximum state guarantee.

    List of the 28 hold-harmless school districts. Additional information will be available in the future.

This estimator allows you to use tax year data for 2002, 2003, 2004, 2005, or 2006. For the year you pick you will need:

  • Your SBT tax forms. All line references are for the 2006 tax return.

  • Certain information used to calculate federal taxable income.

  • If you are a financial institution, balance sheet information for five years.

  • The amount of Michigan personal property taxes paid in the tax year, unless you are an electric or gas utility.

For more information, go to the MBT Webpage, to find MBT Details, MBT Frequently Asked Questions, and MBT Detailed Overview, and more.

If you have questions about the MBT or the definition of a term used in the MBT estimator, you may submit your questions to treasMBT@michigan.gov. If you have a problem using the MBT estimator or have a technical question about how it works, contact MBTEstimator@michigan.gov

Are you ready? Then let’s see how the Michigan Business Tax will affect your business.

 
 
 
 


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