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refundable credits amount calculated on Form 4596, line 5, is Insurance companies are not specifically excluded from the
carried to Form 4588, line 52. statutory definition of a UBG, and thus may be members of a
UBG. However, the tax on authorized insurance companies
Insurance companies that are foreign or alien insurers must
is equal to 1.25 percent of gross direct premiums written on
calculate a retaliatory tax on Form 4588, lines 30 through 46.
property or risk located or residing in Michigan. There is no
The retaliatory tax requires a foreign insurer to pay the same
traditional apportionment for insurance companies. Thus,
type of obligation that a similar Michigan insurer is required to
even when an authorized insurance company is unitary with
pay in the company’s state of domicile. Domestic insurers do
another authorized insurance company, this will have no effect
not calculate a retaliatory tax.
in calculating the tax. As a result, a combined return is not
Further General Guidance required and each insurance company member of a UBG will
file separately on Form 4588.
For purposes of MBT, person means an individual, firm, bank,
financial institution, insurance company, limited partnership, General Information About UBGs
limited liability partnership, copartnership, partnership, joint Unitary Business Group means a group of United States
venture, association, corporation, S corporation, LLC, receiver, persons, other than a foreign operating entity, that satisfies the
estate, trust, any or other group orcombination of groups acting following criteria:
as a unit. of the persons owns or controls, directly or indirectly,
One
A taxpayer includes a single person or a UBG liable for tax, more than 50 percent of the ownership interest with voting
interest, orpenalty. A UBG must file combined a MBT return rights (or rights comparable to voting rights) of the other United
(addressed the in “UBGs and Combined Filing” section this of States persons; AND
General Information).
The UBG has operations that result in a flow of value between
Limited Liability Company. An LLC is classified for MBT persons included in the UBG or has operations that are
purposes according to its federal tax classification. The integrated with, are dependent upon, or contribute to each
following terms, whenever used in MBT forms, instructions, other. Flow of value is determined by reviewing the totality of
and statute, include LLCs indicated: as facts and circumstances of business activities and operations.
• S Corporation includes an LLC federally taxed as an S United States person is defined in Internal Revenue Code (IRC)
Corporation, and a member this of LLC shareholder. is a § 7701(a)(30). A foreign operating entity is defined by statute in
• C Corporation includes an LLC federally taxed as a C MCL 208.1109(5).
Corporation, and a member of this LLC is ashareholder. A For more information on the control and relationship tests for
member orother person performing duties similar to those UBGs, see Revenue Administrative Bulletin (RAB) 2010-1,
of anofficer in true a corporation is anofficer in this LLC. MBT—Unitary Business Group Control Test, and RAB 2010-
NOTE: thisIn booklet, the term “corporation,” used without a 2,
MBT—Unitary Business Group Relationship Tests, on the
C generally or S, refers both to types. Treasury www.michigan.gov/treasury/
Web site at , under
“Reports and Legal Resources.”
Disregarded Entities: Public Act 305 was enacted into
Exemption Guidelines
law on December 27, 2011, to add Michigan Compiled Law
208.1512 to the MBT. This section provides that a person The
tax imposed and levied under the MBT Act does not apply
that is classified as a disregarded entity for federal purposes to
an insurance company authorized under Chapter 46 or 47 of
is classified as a disregarded entity for MBT purposes. This the
Insurance Code of 1956, PA 218 of 1956, MCL 500.4601 to
means that a disregarded entity for federal tax purposes, 500.4673,
and MCL 500.4701 to 500.4747.
including a single member LLC or Q-Sub, must file as if it Filing the Correct Form
were a sole proprietorship owned if it is by an individual, or a A different primary return and instruction booklet are required
branch ordivision if the branch ordivision is owned by another for standard taxpayers (Form 4567) and financial institutions
business entity. (Form 4590).
Unitary Business Groups (UBGs) Due Dates of Annual Returns
and Combined Filing The tax year an of insurance company theis calendar year. An
Special UBG Instructions for Insurance Companies insurance company must file the annual return on or before
By definition UBG a (as defined below) can include insurance March 1 after the end of the tax year. The extension that is
companies, standard taxpayers, and financial institutions. available tothe standard taxpayer under MCL 208.1505(4) is
However, in some cases not all members of the UBG will be not available insurance to companies.
included on the same return. All standard taxpayer members
Amending a Return
in a UBG (except those owned by and unitary with a financial
institution) file a single combined return on the MBT Annual A taxpayer may not amend to revoke the election to remain
Return (Form 4567). Financial institution members of a UBG taxable under the MBT. Once the taxpayer makes a valid election
(and any standard taxpayer owned by and unitary with a to claim a certificated credit, the taxpayer must remain in the
financial institution in the group) file a combined return on the MBT until the certificated credit and any carryforward of that
MBT Annual Return for Financial Institutions (Form 4590). credit are exhausted. Most certificated credits must be claimed
for the taxpayer’s first tax year ending after December 31, 2011.
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