Revenue Administrative Bulletin Addresses "Nexus" Questions
Revenue Administrative Bulletin 2013-9, Michigan Department of Treasury, June 5, 2013, discusses the meaning of "actively solicits" as it is used in one of the corporate income tax nexus standards.
Under the substantial economic presence nexus standard, nexus exists if the taxpayer actively solicits sales in Michigan and has gross receipts of $350,000 or more sourced to Michigan. State law defines "actively solicits" as (1) 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 (2) speech, conduct, or activity that is purposefully directed at or intended to reach persons within Michigan that neither explicitly nor implicitly invites an order for a purchase or sale, but is entirely ancillary to requests for an order.
Active solicitation on its own does not necessarily create nexus. Active solicitation includes, but is not limited to, solicitation through the use of mail, telephone, and email, advertising (including print, radio, Internet, television, and other media), and maintenance of an Internet site through which sales transactions occur with persons in Michigan. Examples include sending mail order catalogs, sending credit applications, maintaining Internet sites offering online shopping, services or subscriptions, and soliciting through media advertising. The same standards used to determine nexus for out-of-state taxpayers are applied to decide if a taxpayer is taxable in another state for apportionment purposes.