The Department of Treasury (Treasury) has issued Revenue Administrative Bulletin 2007-5 (RAB 07-5) to provide guidance to fiscal year taxpayers on how to file their final SBT return which will cover a short period.

The final SBT return for a short period should be extended to the due date for the first short period Michigan Business Tax (MBT) return.  A fiscal year taxpayer should do a soft close at December 31, 2007 and use the numbers to compute the final SBT liability on both the actual method and the annual method.  (See RAB 07-5)  Estimated payments should be made on the quarterly returns based on the method that results in the highest tax in order to avoid underpayment penalty.  The final SBT return should be extended to at least the due date for filing the first MBT short period return, April 30, 2009.

After the fiscal year ends, the taxpayer should calculate both the final SBT return liability and the first MBT return liability on both the actual and annual methods.  The combined method which results in the lowest overall tax for both the final SBT return and the first MBT return should be used.  Treasury has stated in RAB 07-5 that the method used for the first MBT return must be consistent with the method used for the final SBT return.

If the lowest tax method is used for the final SBT return, thus creating an overpayment, Treasury will allow the taxpayer to credit the final SBT overpayment to the first MBT return.

Following is Treasury guidance from FAQ A31 issued March 17, 2008.

The deadline for the filing and payment of final SBT liability for all taxpayers, both calendar year and fiscal year, is April 30, 2008.

Upon request of the taxpayer, the Department of Treasury (Department) will grant an extension to a taxpayer whose fiscal year extends beyond April 30, 2008, provided that substantially all of the tax estimated to be due is paid with the request for extension, in compliance with section 73 of the Single Business Tax Act, MCL 208.73.

Thus, if payment of the estimated tax due is made on or before April 30, 2008 with an extension request, an extension of time to file the short year return will be granted based on the taxpayer's fiscal year as reported on their federal return. The extension of 180 or 240 days will be calculated from the end of the fourth month following the federal tax year end. See instructions for the 2007 Form 4, Application for Extension of Time to File Michigan Tax Returns.

For a fiscal year filer with a late in the year year end, e.g., September 30, if the standard SBT extension period is not sufficient to allow a fiscal year taxpayer to gather necessary information for its final SBT return, the Department will, upon request, grant a special extension appropriate to the circumstances.   [Treasury FAQ A31]