SB-0669, As Passed House, October 6, 2011
September 15, 2011, Introduced by Senator PAPPAGEORGE and referred to the Committee on Finance.
A bill to amend 1967 PA 281, entitled
"Income tax act of 1967,"
by amending section 621 (MCL 206.621), as added by 2011 PA 38.
THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
Sec.
621. (1) Except as otherwise provided in this part, or
under
subsection (2), a taxpayer has
substantial nexus in this
state and is subject to the tax imposed under this part if the
taxpayer has a physical presence in this state for a period of more
than 1 day during the tax year, if the taxpayer actively solicits
sales in this state and has gross receipts of $350,000.00 or more
sourced to this state, or if the taxpayer has an ownership interest
or a beneficial interest in a flow-through entity, directly, or
indirectly through 1 or more other flow-through entities, that has
substantial nexus in this state.
(2)
For purposes of this section, "actively solicits" shall be
defined
by the department through written guidance that shall be
applied
prospectively.
(2) (3)
As used in this section: ,
"physical
(a) "Actively solicits" means either of the following:
(i) Speech, conduct, or activity that is purposefully directed
at or intended to reach persons within this state and that
explicitly or implicitly invites an order for a purchase or sale.
(ii) Speech, conduct, or activity that is purposefully directed
at or intended to reach persons within this state that neither
explicitly nor implicitly invites an order for a purchase or sale,
but is entirely ancillary to requests for an order for a purchase
or sale.
(b) "Physical presence" means any activity conducted by the
taxpayer or on behalf of the taxpayer by the taxpayer's employee,
agent, or independent contractor acting in a representative
capacity. Physical presence does not include the activities of
professionals providing services in a professional capacity or
other service providers if the activity is not significantly
associated with the taxpayer's ability to establish and maintain a
market in this state.
Enacting section 1. This amendatory act takes effect January
1, 2012.