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16. Are the Michigan Single Business Tax and Michigan Business Tax deductible for Maine corporate income tax purposes?

The Michigan Single Business Tax (SBT) was eliminated for tax years beginning after December 31, 2007. The SBT is based on Federal Net Income (federal taxable income for taxable corporations) with certain allowable adjustments. Although the tax is limited to one-half of adjusted gross receipts multiplied by the SBT tax rate, the tax is based on income. Therefore, the tax is not deductible for Maine income tax purposes.

The Michigan Business Tax is made up of four taxes: 1)4.95% tax on income; 2) .8% tax on gross receipts; 3) 1.25% tax on direct premiums; 4) .235% tax on net capital. Items 2, 3 and 4 are deductible for Maine corporate income tax purposes to the extent deducted for federal corporate income tax purposes. The portion based on income must be added back to the extent it is deducted from federal taxable income.

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