The Bottle Deposit Administration Credit was added to the MBT as part of 2007 PA 145. Section 451 provides that a distributor or manufacturer who originates a deposit on a beverage container in accordance with Michigan's Bottle Bill, MCL 445.571 to 445.576, may claim a credit against its MBT liability equal to (a) 30.5% of the taxpayer's expenses incurred during the tax year to comply with the Bottle Bill, if the section 281 surcharge is imposed in the same year, or (b) 25% of such expenses if the surcharge is not imposed in the same year. MCL 208.1451(1)(a) and (1)(b). If the amount of the allowed credit exceeds the taxpayer's tax liability for the tax year, the excess is not refunded and may not be carried forward as an offset against the taxpayer's tax liability in future years. MCL 208.1451(2).

Section 451 does not define "expenses" or specify the types of expenses that qualify for the credit. In order to comply with the Bottle Bill, distributors who originate deposits on beverage containers (meaning that they charge the deposit to their retailer customers) typically pick up empty beverage containers from retailers (usually at the same time that they distribute new product), process the returned containers as required, and sell the materials into the recycling market. Distributors also have reporting and payment obligations with respect to unclaimed bottle deposits. MCL 445.573a; 445.573b. Thus, distributors may incur expenses related to receiving and sorting empty containers, storing containers, cleaning or crushing containers, and recordkeeping. A distributor's compliance-related expenses will vary depending on whether the retailers it collects from use reverse vending machines. Reverse vending machines crush or shred the returned containers, eliminating or reducing the need (and cost) for distributors to collect and process the material recovered.

In order to qualify for the Bottle Deposit Administration Credit, expenses must be ordinary, necessary, and directly related to the taxpayer's compliance with the Bottle Bill. "Ordinary" means that another manufacturer or distributor who originates deposits would likely incur a similar expense in complying with the Bottle Bill. "Necessary" means that the expense is one the taxpayer would not have incurred absent the necessity of complying with the Bottle Bill. "Directly related" means that the main purpose of the qualifying expenditure was compliance with the requirements of the Bottle Bill. For example, a can-crushing machine purchased in order to process the empty deposit beverage containers picked up from retailers would probably qualify for the credit in the year of purchase. A printer purchased for general office use, and which is also used to occasionally print reports related to bottle deposits, would not qualify.

Taxpayers claiming the Bottle Deposit Administration Credit must maintain adequate documentation, through business books and records, supporting all expenses for which the credit is claimed.