Michigan: Taxpayers entitled to apportion income under Compact election

July 2014


On July 14, 2014, the Michigan Supreme Court, in a 4-3 decision with one Justice issuing a separate concurring opinion, held that International Business Machines Corporation (IBM) was entitled to use the Multistate Tax Compact’s elective three-factor apportionment formula to calculate its 2008 Michigan business tax.  The court further held that the modified gross receipts component of the tax fit within the broad definition of an income tax under the Compact, thereby allowing IBM to use the Compact’s elective formula for this portion of the tax base. [International Business Machines Corp. v. Department of Treasury, Docket No. 146440, July 14, 2014]

Return to Tax research and insights

Contact us

Peter Michalowski
National SALT Practice Leader
Tel: +1 (646) 471 5259

Follow us