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Corporate Income Tax
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Unitary Business Groups 9. Is it possible to have a unitary group of financial institutions under the CIT? How will such groups file a combined return?
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Answer:
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Yes, under MCL 206.651(f)(i) a "financial institution" is defined as:
A bank holding company, a national bank, a state chartered bank, an office of thrift supervision chartered bank or thrift institution, a savings and loan holding company other than a diversified savings and loan holding company as defined in 12 USC 1467a(a)(F), or a federally chartered farm credit system institution.
A "financial institution" includes any entity, other than an entity subject to the tax imposed under chapter 12 (insurance company), that is directly or indirectly owned by an entity described in subparagraph (i) and is a member of the unitary business group. MCL 206.651(f)(ii). This includes any disregarded entity owned by the financial institution. MCL 206.699. A unitary business group of financial institutions is permitted by definition. MCL 206.651(f)(iii).
Thus, if a financial institution or its subsidiary satisfies the control test and one of the two relationship tests outlined in MCL 206.611(6) with another financial institution and its subsidiaries, the unitary business group will file a combined return. MCL 206.691. A unitary business group of financial institutions will eliminate inter-group gross business when calculating the gross business factor. MCL 206.657(4).
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