Taxes - U28. How will MCL 208.1503, which gives taxpayers the choice of two filing methods for the first MBT return, apply to a unitary group where members of the group have different tax years?

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U28. How will MCL 208.1503, which gives taxpayers the choice of two filing methods for the first MBT return, apply to a unitary group where members of the group have different tax years?

MCL 208.1503 provides the general rule that a fiscal year taxpayer may elect to file its first MBT return by either annualizing business income and modified gross receipts as if the MBT where in effect on the first day of the taxpayer's annual accounting period, or by computing MBT liability based on actual business income and modified gross receipts for the portion of the accounting period in which the MBT was in effect.

"Taxpayer" means a person or a unitary business group in accordance with MCL 208.1117(5). A unitary business group must file a combined return under MCL 208.1511 using the tax year of the designated member.

If the designated member is a calendar year taxpayer, Section 503 is inapplicable to the group. However, if the designated member uses a fiscal year, that member must choose one of the two methods available in Section 503. Its final return under the SBT must be consistent with this choice. All other members of the group will conform to this method.

This election only applies to the first MBT return for taxpayers with tax years ending before December 31, 2008.