Specific Tax On Adjusted Tax Base; Rates; "Adjusted Tax Base" Defined; Tax Imposed On Privilege Of Doing Business; Reduction Of Adjusted Tax Base In Lieu Of Reduction; Limitation; Applicability Of Subsection (4); Effect Of Comprehensive Annual Financial Report; Annualized Rate - Mich. Comp. Laws Section 208.31

History: 1975, Act 228, Eff. Jan. 1, 1976 ;-- Am. 1976, Act 389, Imd. Eff. Dec. 30, 1976 ;-- Am. 1977, Act 273, Imd. Eff. Dec. 15, 1977 ;-- Am. 1981, Act 208, Imd. Eff. Dec. 30, 1981 ;-- Am. 1982, Act 414, Imd. Eff. Dec. 28, 1982 ;-- Am. 1987, Act 262, Imd. Eff. Dec. 28, 1987 ;-- Am. 1991, Act 77, Imd. Eff. July 16, 1991 ;-- Am. 1993, Act 329, Eff. Apr. 1, 1994 ;-- Am. 1994, Act 247, Eff. July 7, 1994 ;-- Am. 1999, Act 115, Imd. Eff. July 14, 1999
Constitutionality: In Trinova Corp. v. Michigan Department of Treasury, 111 S.Ct. 818 (1991), the United States Supreme Court held that Michigan's single business tax is not violative of the Commerce Clause or Due Process Clause of the Fourteenth Amendment of the United States Constitution. The Court stated that the single business tax meets the Court's test for sustaining a Commerce Clause challenge, by being a tax that: (1) Is applied to an activity with a substantial nexus with the taxing state; (2) Is fairly apportioned; (3) Does not discriminate against interstate commerce; and (4) Is fairly related to the services provided by the state. Neither does the tax violate due process requirements because there is a "minimal connection between the interstate activities and the taxing State, and a rational relationship between the income attributed to the State and the intrastate values of the enterprise."
Compiler's Notes: Section 2 of Act 414 of 1982 provides: "This amendatory act shall take effect for tax years commencing after December 31, 1982."Section 3 of Act 208 of 1981 provides: "Deletions of the word "total" made by this amendatory act in section 31 of the single business tax act, Act No. 281 of the Public Acts of 1975, as amended, being section 208.35 of the Michigan Compiled Laws, shall serve to cure and clarify any misinterpretation of the operation of section 31 since the effective date of Act No. 273 of the Public Acts of 1977. When originally enacted by Act No. 228 of the Public Acts of 1975, section 31 used the term "total tax base" to indicate that the exclusions made by section 9(4)(c) of the single business tax act of a portion of the depreciation, amortization, or immediate or accelerated write-off related to the cost of tangible assets should be added back to the tax base, before apportionment or allocation, for purposes of section 31. However when, by Act No. 273 of the Public Acts of 1977, section 9(4)(c) was amended to require that all depreciation, amortization, or immediate or accelerated write-off related to the cost of tangible assets be included in a person's tax base, there became no difference between the "tax base" and "total tax base" of a person. The deletion of the word "total" by this amendatory act is an expression of the Legislature's intent that the terms "total tax base" and "tax base" were, since the effective date of Act No. 273 of the Public Acts of 1977, to be considered synonymous and that its deletion by this amendatory act should be interpreted as a resolution of further misinterpretations." Enacting section 3 of 1999 PA 115 provides:"Enacting section 3. The single business tax act, 1975 PA 228, MCL 208.1 to 208.145, is repealed effective on the January 1 of the year in which the rate under section 31 is reduced to 0.0%, and is not effective for tax years that begin on or after that date."