Even though the Corporate Income Tax seems to be a much better deal, based upon previous discussions, the State of Michigan has decided to allow businesses that are otherwise required to file the Corporate Income Tax, to instead continue to file the Michigan Business Tax for tax years after December 31, 2011.
One of the key reasons why corporations may find it beneficial to file their return as the MBT instead of the new CIT would likely relate to the tax credits which are eliminated under the new CIT. Nearly all tax credits are eliminated under the CIT. For this reason, as of right now, if businesses would qualify for any "certified credits" they would be allowed to file an MBT return.
It is very important to note that right now, the Employment Credit is included in the definition of certified credits, this credit allows businesses to take a credit for wages and certain employment benefits provided to employees.It is interesting that almost all businesses that would otherwise qualify to file the CIT, could file an MBT tax return. For a list of credits available as qualified credits, click here.
It is also interesting because while the transition to the new CIT tax will likely cost a great deal in administration costs, because of the decision to keep the MBT tax available, legacy costs associated with auditing two types of returns could be very substantial. High oversight and administration costs should be watched closely, as Michigan can ill afford to go without these tax revenues.
One of the key reasons why corporations may find it beneficial to file their return as the MBT instead of the new CIT would likely relate to the tax credits which are eliminated under the new CIT. Nearly all tax credits are eliminated under the CIT. For this reason, as of right now, if businesses would qualify for any "certified credits" they would be allowed to file an MBT return.
It is very important to note that right now, the Employment Credit is included in the definition of certified credits, this credit allows businesses to take a credit for wages and certain employment benefits provided to employees.It is interesting that almost all businesses that would otherwise qualify to file the CIT, could file an MBT tax return. For a list of credits available as qualified credits, click here.
It is also interesting because while the transition to the new CIT tax will likely cost a great deal in administration costs, because of the decision to keep the MBT tax available, legacy costs associated with auditing two types of returns could be very substantial. High oversight and administration costs should be watched closely, as Michigan can ill afford to go without these tax revenues.
No comments:
Post a Comment