Legislation Would Codify Definition Contained in Revenue Administrative Bulletin 2007-6
The Michigan House of Representatives has passed a bill that would, if enacted, define "actively solicits" for determining nexus under the corporate income tax. The House version of the bill is the same as the version passed earlier by the Senate.
"Actively solicits" would be defined as:
· speech, conduct, or activity that is purposefully directed at or intended to reach persons within Michigan and that explicitly or implicitly invites an order for a purchase or sale; or
· speech, conduct, or activity that is purposefully directed at or intended to reach persons within Michigan that neither explicitly or implicitly invites an order, but is entirely ancillary to requests for an order for a purchase or sale.
The bill would be effective January 1, 2012.
In its present form, the law is written so that the Michigan Department of Treasury can define "actively solicits" through written guidance to be applied prospectively. The proposed changes would essentially codify a portion of the guidance that the department provided regarding nexus for the Michigan business tax in Revenue Administrative Bulletin 2007-6.