Applicable to tax years that begin after 2012, “affiliated groups” are allowed to elect to file combined returns under the Michigan corporate income tax law. In general, the term “affiliated group” is defined as it is in IRC §1504, except that it includes all United States persons that are corporations, insurance companies, or financial institutions (other than a foreign operating entity) that are commonly owned, directly or indirectly, by any member of the affiliated group and other members of the group of which more than 50% of the ownership interest with voting rights or ownership interests that confer comparable rights is directly or indirectly owned by a common owner or owners. A taxpayer that is part of an affiliated group is allowed to elect to have all members of the affiliated group treated as a unitary business group. This group then files a combined return for 10 years, with the option to renew the election once for another 10 years. If the election renewal is not made immediately, then the election is not allowed in any of the next three tax years. The election is irrevocable and remains in effect for the time during which ownership requirements are met irrespective of whether the federal consolidated group to which the unitary business group belongs stops filing a federal consolidated return or whether the common parent changes due to a reverse acquisition or an acquisition by a related person. The definition of “unitary business group” is revised to include an affiliated group that makes the election to file as a unitary business group.
Act 266 (S.B. 367), Laws 2013, applicable as noted; Press Release, Gov. Rick Snyder, December 30, 2013