Michigan - Trial court rules MTC is a binding compact, apportionment election applicable to business income tax base of the MBT

June 2013


On June 6, 2013, a Michigan trial court held that the Multistate Tax Compact (MTC) is a binding compact that cannot be repealed by a conflicting statute. Accordingly, the business income tax base of the Michigan Business Tax (MBT) may be apportioned pursuant to the MTC. However, because the MBT's modified gross receipts tax base is not an 'income tax,' it cannot be apportioned according to the MTC. This decision represents a departure from the Michigan appellate court's recent opinion holding that the MTC election is not available to MBT taxpayers. Michigan taxpayers should consider protective refund claims under the MBT consistent with the rationale in this opinion. [Anheuser-Busch, Inc. v. Michigan Department of Treasury, Michigan Court of Claims, No. 11-85-MT (6/6/13)].

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