The effective date for the Michigan Business Tax (MBT) is January 1, 2008. Therefore all taxpayers with a tax year other than a calendar year ending on December 31 will have to file a short period MBT return covering the period January 1, 2008 to the end of their fiscal year. The MBTA provides the taxpayer options on calculating the MBT for the short period. Following is a summary of the MBT provisions covering short period returns and amended returns.

Short Period Returns

If a taxpayer's tax year ends before December 31, 2008 or if a taxpayer's first tax year is less than 12 months, then the taxpayer may elect to compute the tax for the portion of that tax year to which the MBT applies or that first tax year of the MBT in accordance with 1 of two acceptable methods:

Apportionment: The tax may be computed as if the MBT were effective on the first day of the taxpayer's annual accounting period and the amount computed shall be multiplied by a fraction, the numerator of which is the number of months in the taxpayer's first tax year and the denominator of which is 12.  [MCL 208.1503(a)]

Separate Accounting: The tax may be computed by determining the business income tax base and modified gross receipts tax base in the first tax year in accordance with an accounting method satisfactory to the Department of Treasury that reflects the actual business income tax base and modified gross receipts tax base attributable to the period.  [MCL 208.1(503(b)]

Federal Income Tax Returns

A taxpayer required to file a MBT return may be required to furnish a true and correct copy of any return or portion of any return filed under the provisions of the internal revenue code. [MCL 208.1507(1)]

A taxpayer shall file an amended return with the department showing any alteration in or modification of a federal income tax return that affects its business income tax base or modified gross receipts tax base under the MBT. The amended return must be filed within 120 days after the final determination by the internal revenue service. [MCL 208.1507(2)]

Under the Single Business Tax (SBT), the taxpayer must either prorate or annualize the various components of the SBT tax base to compute a short period return starting with the first day of their fiscal year starting in 2008 and ending on December 31, 2007.