I have discussed this legislation in earlier posts, but now it is official. On May 25, 2011, Michigan Governor Rick Snyder signed legislation (H.B. 4361, 4362, 4479-4484, Public Acts 38-45) replacing the Michigan Business Tax (MBT) with a corporate income tax and making major changes to the state's individual income tax law.
Effective January 1, 2012, the state's MBT will be replaced by a corporate income tax (CIT) imposed on only on businesses organized as C corporations under federal law. Sole proprietorships and pass-through entities such as partnerships, S corporations and limited liability companies currently taxed at the entity level under the MBT would not be required to pay taxes or file returns under the CIT. The term “corporation” under the CIT would not include an insurance company or a financial institution.
To access the bill, go to Michigan HB 4361.