The gross receipts filing threshold and the filing threshold credit are both
calculated before a unitary business group eliminates inter-company
transactions. Under the MBT Act,a unitary business group is required to file a
combined return that includes all group members that are U.S. persons. MCL
208.1511. Section 511 further mandates that "all transactions between the
persons included in the unitary business group shall be eliminated from the
business income tax base,modified gross receipts tax base and the apportionment
formula under this act." MCL 208.1511. The language of the statutory sections
specifically addressing the tax bases and the apportionment formula is
consistent with this mandate.
Conversely,the sections of the MBT Act providing for the $350,000 gross receipts
filing threshold and the gross receipts filing threshold credit (the phase-in
credit for taxpayers whose gross receipts are between $350,000 and $700,000) do
not contain language requiring,or authorizing,unitary business groups to
eliminate inter-company transactions when making the necessary calculations to
determine the applicability of the thresholds. These sections state that the
stipulated gross receipts amounts are those after allocation and
apportionment,with no other prescribed adjustment for transactions between
members of a unitary business group. MCL 208.1505(1); MCL 208.1411.
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