Michigan Treasury Issues Notice on State’s Corporate Income Tax Treatment of Federal Business Interest Limitation

The Michigan Department of Treasury (DOT) June 8 issued a notice stating how the state conforms to Internal Revenue Code Section 163 (j), the federal business interest expense limitation, when computing corporate income tax liability. The DOT included information on: 1) pro forma corporations in consolidated groups that meet the small business exemption and are treated as excepted trades or businesses; 2) corporate income tax base for pro forma corporations and pro forma adjusted taxable income; 3) the state’s eliminations for unitary business groups; 4) the state’s carryforward of disallowed interest for consolidated returns; and 5) reasonable cause penalty waivers. ...