HB-5009, As Passed House, February 18, 2014HB-5009, As Passed Senate, February 13, 2014

SENATE SUBSTITUTE FOR

HOUSE BILL NO. 5009

     A bill to amend 1967 PA 281, entitled

"Income tax act of 1967,"

by amending section 691 (MCL 206.691), as amended by 2013 PA 266.

THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

     Sec. 691. (1) Except as otherwise provided under section

680(3), a unitary business group shall file a combined return that

includes each United States person that is included in the unitary

business group. Each United States person included in a unitary

business group or included in a combined return shall be treated as

a single person, and all transactions between those persons

included in the unitary business group shall be eliminated from the

corporate income tax base, and the apportionment formulas, and for

purposes of determining exemptions, credits, and the filing

threshold under this part. If a United States person included in a

unitary business group or included in a combined return is subject

to the tax under chapter 12 or 13, any corporate income

attributable to that person shall be eliminated from the corporate

income tax base and any sales attributable to that person shall be

eliminated from the apportionment formula under this part.

     (2) A person that is part of an affiliated group may elect

without the consent of the department to have all of the persons

that are included in that affiliated group to be treated as a

unitary business group. A taxpayer that elects to file as a unitary

business group pursuant to this subsection shall compute its tax

under this part in accordance with all other provisions of this

part that apply to a unitary business group. The taxpayer shall

make the election under this subsection on a form or in a format as

prescribed by the department that is to be filed in a timely manner

with the taxpayer's annual return. Each person included in the

affiliated group is deemed to have agreed to be bound by the

election made under this subsection and any renewal of that

election and to have waived any objection to its inclusion in the

affiliated group and treatment as a unitary business group. Each

person that subsequently enters the affiliated group after the tax

year for which the election is made is deemed to have consented to

the application of and is bound by the election and to have waived

any objection to its inclusion in the affiliated group and

treatment as a unitary business group. An election made pursuant to

this subsection is irrevocable and binding for and applicable to

the tax year for which it is made and for the next 9 tax years. The

election shall remain in effect for the time period in which the

ownership requirements under this section are met irrespective of

whether a federal consolidated group to which the unitary business

group belongs discontinues the filing of a federal consolidated

return or whether the common parent changes due to a reverse

acquisition or acquisition by a related person. Upon the expiration

of the election after it has been in effect for 10 tax years, an

election may be renewed for another 10 tax years, without the

consent of the department; provided however, that in the case of a

nonrenewal a new election under this subsection is not permitted in

any of the immediately following 3 tax years. The renewal shall be

made on a form or in a format as prescribed by the department that

is to be filed in a timely manner with the taxpayer's annual return

after the completion of a 10-year period for which an election

under this subsection was in place.

     Enacting section 1. This amendatory act is effective for tax

years that begin after December 31, 2013.