Michigan Tax Tribunal Rules in Favor of Taxpayer in TTI Inc. v. Michigan Department of Treasury Case

• The Michigan Tax Tribunal ruled in favor of a taxpayer in the case of TTI Inc. v. Michigan Department of Treasury.
• The Tribunal concluded that a unitary business group (UBG) did not exist under Michigan Corporate Income Tax (CIT) law.
• The taxpayer and its subsidiary had different customer bases and did not have business operations that resulted in a flow of value between them.
• The businesses shared common officers and engaged in intercompany sales, but these sales only accounted for a small percentage of their annual revenue.
• The taxpayer and the subsidiary had common policies and plans, but these did not result in cost savings for either business.
• The taxpayer had control over the subsidiary due to its 100% ownership.
• The only issue in the case was whether the relationship test was met between the two businesses.
• The relationship test is met if there is a flow of value between the corporations or if they are integrated with, dependent upon, or contribute to each other.
• The Department’s guidance on the relationship test is based on the U.S. Supreme Court’s decision in Container Corp. of America v. Franchise Board.

Source: aprio.com

Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.

---

---