The Michigan Court of Appeals ruled in two consolidated cases that the state’s estimated corporate income tax assessments were invalid because the taxpayers’ sales factors were improperly calculated using an alternative population-based formula rather than the statutory costs of performance (COP) formula. The two taxpayers were out-of-state book publishers that entered into a joint venture to develop, market and sell books in Michigan from locations outside of the state. The court upheld the lower court’s determination that affidavits submitted by the taxpayer sufficiently established the sourcing of all of the developing publisher’s service revenue outside of Michigan under the COP sourcing method. By rejecting the Department’s assertions regarding the sufficiency of the taxpayers’ COP evidence, the case illustrates that taxpayers should be wary of states’ attempts to reject COP sourcing by making it practically impossible for taxpayers to prove the location of every cost for every transaction. The case is also procedurally interesting because the court ruled that, so long as a taxpayer provides its in-state and everywhere sales figures, the Department cannot force a taxpayer to produce a 50-state apportionment summary, a document which is frequently requested by state auditors. JRS Distribution Co. v. Mich. Dep’t of Treas., No. 302441 (Mich. App. Dec. 11, 2012) (unpublished); Publications Int’l, Ltd. v. Dep’t of Treas., No. 307350 (Mich. App. Dec. 11, 2012) (unpublished).