Michigan Business Tax: How does it work? FILING THRESHOLD - Taxpayers with less than $350,000 in gross receipts apportioned or allocated to Michigan are exempt from the MBT. A tax return is required to be filed if apportioned or allocated gross receipts exceed $350,000. TAX PHASE-IN BASED ON GROSS RECEIPTS - The MBT filing threshold is “phased-in” through the use of a credit for companies with gross receipts between $350,000 and $700,000. The tax credit is based on a declining scale as gross receipts approach $700,000.
MBT in Three Parts: Income Tax , Gross Receipts Tax, & Surtax Business Income Tax Structure Business Income (Federal taxable income from business activity with specific statutory modifications) x Apportionment Factor – (Receipts in Michigan divided by Total Receipts) ========================================= Apportioned Business Income x 4.95%Tax Rate ========================================= Estimated Liability Gross Receipts Tax Gross Receipts (Less Purchases from other firms, including inventory and depreciable assets) x Apportionment Factor – (Receipts in Michigan divided by Total Receipts) ========================================= Apportioned Gross Receipts x 0.8%Tax Rate ========================================= Estimated Liability Surtax Business Income Tax Liability + Gross Receipts Tax Liability (Before Credits) x 21.99% ========================================= Surtax Liability Business Income Liability + Gross Receipts Liability + Surtax = Est. Tax Liability Before Credits
Available Credits (Partial List): SBT Carryforward Credits Compensation Credit Investment Tax Credit R&D Tax Credit Small Business Credit/Alternative Income Tax Entrepreneurial Credit Industrial Personal Property Tax Credit Renaissance Zone Credit MEGA Job Creation Credit NextEnergy Credit Start-up Business Credit Brownfield Credit Charitable Credits (Various) For Full Details about the MBT, Please visit www.michigan.gov/MBT.