Taxpayers Must Use the Single Factor Sales Apportionment
Public Act 40 (H.B. 4479) of 2011, effective May 25, 2011, provides that taxpayers subject to the Michigan business tax, the corporate income tax, the franchise tax on financial institutions, or the personal income tax are required to apportion or allocate their income according to the state law provisions and not the Multistate Tax Compact provisions, beginning January 1, 2011. Previously, taxpayers could choose to apportion or allocate their income under either the applicable state law or the Multistate Tax Compact provisions. The Multistate Tax Compact provides for an equally weighted apportionment factor consisting of property, payroll, and sales. Michigan law requires apportionment based on a 100% sales factor.