M2. How are gross receipts, rents etc. received from real property apportioned?
Receipts from real property are apportioned based on location of the real
Rental income received from real property is included in both the business
income from business activity tax base and modified gross receipts tax base of
the taxpayer. Business activity includes the rental of property. MCL
Under MCL 205.1301(1) each tax base is apportioned or allocated in accordance
with the rules under Chapter 3 of the Act. Sales confined solely to Michigan are
allocated to Michigan. Sales within and outside of Michigan are apportioned
based on a sales factor calculated under section 303. MCL 208.1301(2).
The sales factor is a fraction, the numerator is Michigan sales and the
denominator is sales everywhere. MCL 208.1303(1). Receipts from the sale, lease,
rental or licensing of real property are Michigan sales if the property is
located in Michigan. MCL 208.1305(1)(b).