Income/Franchise:
Michigan: US Supreme Court Denies Reviewing Case on Apportionment Formula Validity as Applied to Gain from Deemed Asset Sale
Docket No. 23-443, US (petition for cert. denied 11/20/23). The US Supreme Court (Court) denied the taxpayer’s petition for review in a case involving the gain on sale of an out-of-state business pursuant to an Internal Revenue Code section 338(h)(10) election and application of the statutory standard apportionment formula (i.e., single sales factor) under the Michigan business tax (MBT) for the prior short-year at issue. Earlier this year, the Michigan Supreme Court held that applying the standard formula to the circumstances in the case did not run afoul of the US Constitution’s Due Process and Commerce Clauses [see Case No. 163742, Mich. (7/31/23) and State Tax Matters, Issue 2023-31, for more details on this earlier ruling]. In its filed petition with the Court, the taxpayer had contended that “this case concerns a state’s attempt to tax a company’s value based on de minimis, temporary contacts when that company is already subject to tax on such value in another state,” as well as involves “an issue of national importance affecting interstate commerce, extraterritorial taxation, and a split among state courts of last resort.” Please contact us with any questions.
30 Rockefeller Plaza New York, NY 10112-0015 United States
About Deloitte Deloitte refers to one or more of Deloitte Touche Tohmatsu Limited (“DTTL”), its global network of member firms, and their related entities (collectively, the “Deloitte organization”). DTTL (also referred to as “Deloitte Global”) and each of its member firms and related entities are legally separate and independent entities, which cannot obligate or bind each other in respect of third parties. DTTL and each DTTL member firm and related entity is liable only for its own acts and omissions, and not those of each other. DTTL does not provide services to clients. Please see www.deloitte.com/about to learn more.
Deloitte provides industry-leading audit and assurance, tax and legal, consulting, financial advisory, and risk advisory services to nearly 90% of the Fortune Global 500® and thousands of private companies. Our professionals deliver measurable and lasting results that help reinforce public trust in capital markets, enable clients to transform and thrive, and lead the way toward a stronger economy, a more equitable society and a sustainable world. Building on its 175-plus year history, Deloitte spans more than 150 countries and territories. Learn how Deloitte’s approximately 415,000 peopleworldwide make an impact that matters at www.deloitte.com.
