Know What the new Michigan Business Tax Means for You

Author: Thomas R. Vander Hulst
Date: 10/18/2007

On January 1, 2008 the Michigan Business Tax (MBT) will replace the Michigan Single Business Tax (SBT). The MBT has two components, one based on income and the other based on gross receipts. The business income tax rate will be 4.95% and the gross receipts tax rate will be .8%. It is important to note that businesses will be paying both the income tax and the gross receipts tax. Under the old SBT, businesses paid only the greater of the income or gross receipt taxes. There are several allocation, apportionment and credit issues that will need to be determined on a case-by-case basis. As with any new law, there will be winners and losers. A competent tax professional can help you make the MBT work for you, or at least help minimize the cost.