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Interest income from unrelated parties is included in a taxpayer's modified gross receipts (MGR) tax base, with one exception. MCL 208.111(1) Interest income received by a taxpayer that is an individual, estate or partnership organized exclusively for estate or gift planning purposes or trust organized exclusively for estate or gift planning purposes from the taxpayer's personal investment portfolio or retirement account or from transactions, activities and sources other than in the regular course of the taxpayer's trade or business is excluded from gross receipts.
The inclusion of dividends from a subsidiary into a taxpayer's MGR tax base depends upon whether the taxpayer is a unitary business group and whether the subsidiary is a member of the unitary group. Dividends from a subsidiary are included in a taxpayer's MGR tax base where the subsidiary is not a member of a unitary business group. Dividends from a subsidiary that is a member of a unitary business group taxpayer, however, are not included in the taxpayer's MGR tax base as the inter-company dividends are eliminated under MCL 208.1203(3) and MCL 208.1511.
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