Income/Franchise:
Michigan: Newsletter Discusses R&D Credit, Case on Sourcing Wholesale Electricity Sales, Alternative Apportionment, and PTET

Treasury Update Newsletter, Mich. Dept. of Treasury, Tax Policy Division (3/25). A newsletter published by the Tax Policy Division of the Michigan Department of Treasury reminds Michigan taxpayers about:

1. New state law providing a refundable research and development (R&D) income tax credit under Michigan’s corporate income tax (CIT) and a credit against withholding by flow-through entity employers not subject to the CIT or Michigan business tax (MBT), available starting with R&D expenses incurred during the 2025 calendar year [see H.B. 5100, signed by gov. 1/13/25; H.B. 5101, signed by gov. 1/13/25; and previously issued Multistate Tax Alert for more details on the new R&D credit];
2. A recent Michigan Tax Tribunal ruling which held that a taxpayer’s wholesale electricity sales must be sourced entirely to Michigan rather than ultimate destination [see State Tax Matters, Issue 2025-7, for additional details on this case];
3. A new revenue administrative bulletin (RAB 2024-24) on the procedures and standards governing the alternative apportionment relief provisions in Parts 1 and 2 of Michigan’s Income Tax Act and in the Michigan Business Tax Act in response to a 2023 Michigan Supreme Court decision addressing the use of standard versus alternative apportionment [see State Tax Matters, Issue 2024-50, for additional details on RAB 2024-24]; and
4. New state law changes related to Michigan’s flow-through entity tax [see State Tax Matters, Issue 2025-6, for additional details on these law changes].

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