Last week, the Michigan Department of Treasury issued a Notice to Taxpayers explaining its approach in administering the now final Michigan Court of Appeals decision in LaBelle Management, Inc. v. Department of Treasury, 888 N.W.2d 260 (Mich. Ct. App. 2016), leave to appeal denied by 889 N.W.2d 250 (Mich. 2017) (mem.). The Court invalidated the Department’s position of indirect ownership rules for purposes of determining whether companies are more than 50% owned and included in a unitary business group. The Notice explains that:

  • LaBelle applies retroactively;
  • The Department expects taxpayers to make corrective filings for all open tax years for purposes of both the Michigan Business Tax and the Michigan Corporate Income Tax; and
  • Corrected filings resulting from LaBelle will not be subject to penalties and the Department will waive interest for returns filed by December 31, 2017.

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