B39. MCL 208.1201(2) provides a deduction for the book-to-tax difference or deferred liability resulting from the change from the

No. The deduction provided under MCL 208.1201(2), commonly know as the FAS 109 deduction, does not apply to a taxpayer that does not keep its books in accordance with GAAP.

The plain language of the statute makes clear that only taxpayers that use GAAP qualify for the credit. Section 201(3) states

The deduction ... shall not exceed the amount necessary to offset the net deferred tax liability of the taxpayer as computed in accordance with generally accepted accounting principles.

A cash method or cash basis taxpayer may take the deduction to offset the book-to-tax difference or deferred tax liability if that taxpayer keeps its books in accordance with GAAP.