Federally Disregarded Entities Required to File Michigan Business Tax Returns
The Michigan Department of Treasury has issued a notice stating that disregarded entities for federal tax purposes are required to file Michigan business tax (MBT) returns. For all open tax periods, a person that is a federally disregarded entity, including a single member limited liability company or a QSub, must either file a separate MBT return or file as a member of a unitary business group by June 30, 2011. A person disregarded for federal tax purposes that filed as a sole proprietor, branch, or division of its owner for MBT purposes is considered a non-filer under the statute of limitations.
A taxpayer that previously filed an MBT return that included one or more previously disregarded entities, including a unitary business group, must amend its returns for all open periods, even if the tax liability is the same. These returns are also due June 30, 2011. Interest will be due on deficiencies. However, the failure-to-file penalty will be waived until June 30. A previously disregarded entity is required to register with the department if it has no federal employer identification number (FEIN) or Michigan Treasury assigned number (TR). Taxpayers are required to attach pro forma federal returns.