This document summarizes information from Samuel L. Hodges, a CPA with over 20 years of experience providing state and local tax advice. It discusses topics related to the Michigan Business Tax including nexus, apportionment, credits, and definitions. Base case examples are provided to illustrate tax calculations under different scenarios.

1. MBT Large and Small Some things to think about

5. Tax Law in the making…

6. Base Case # 1 # 2 R/E

7. 18,700 2,733 5,712 38,916 (20,614) 18,303 Liability Before Credits 3,371 493 1,030 7,015 (3,716) 3,299 Surcharge @ 21.99% 15,329 2,240 4,682 31,901 (16,898) 15,003 Total MBT Before Surcharge 8,539 (24,750) 3,193 14,076 (9,536) 4,539 Income Tax @ 4.95% 172,500 (500,000) 64,500 284,361 (192,656) 91,705 Business Income Tax Base 172,500 (500,000) 64,500 284,361 (192,656) 91,705 Apportioned Business Income 50.0000% 100.0000% 10.0000% 58.0328% 50.0000% 61.1364% Apportionment 345,000 (500,000) 645,000 490,000 (340,000) 150,000 Business Income Tax Base 6,790 2,240 1,490 17,825 (6,800) 10,464 Modified Gross Receipts Tax 6,790 2,240 1,490 17,825 (6,800) 10,464 Tax @ .8% 848,750 280,000 186,200 2,228,169 (850,000) 1,308,013 Apportioned Gross Receipts 50.0000% 100.0000% 10.0000% 58.0328% 50.0000% 61.1364% Apportionment 1,697,500 280,000 1,862,000 3,839,500 (1,700,000) 2,139,500 Modified Gross Receipts 1,700,000 2,500,000 1,900,000 6,100,000 (1,700,000) 4,400,000 Total Sales 850,000 2,500,000 190,000 3,540,000 (850,000) 2,690,000 Michigan Sales 1040 1065 1120-s R/E Holding Operating 2 Operating 1 Sub-Total Elim UBG Michigan Business Tax

9. 18,700 2,733 5,712 38,916 (20,614) 18,303 Liability Before Credits 3,371 493 1,030 7,015 (3,716) 3,299 Surcharge @ 21.99% 15,329 2,240 4,682 31,901 (16,898) 15,003 Total MBT Before Surcharge 8,539 (24,750) 3,193 14,076 (9,536) 4,539 Income Tax @ 4.95% 172,500 (500,000) 64,500 284,361 (192,656) 91,705 Business Income Tax Base 172,500 (500,000) 64,500 284,361 (192,656) 91,705 Apportioned Business Income 50.0000% 100.0000% 10.0000% 58.0328% 50.0000% 61.1364% Apportionment 345,000 (500,000) 645,000 490,000 (340,000) 150,000 Business Income Tax Base 6,790 2,240 1,490 17,825 (6,800) 10,464 Modified Gross Receipts Tax 6,790 2,240 1,490 17,825 (6,800) 10,464 Tax @ .8% 848,750 280,000 186,200 2,228,169 (850,000) 1,308,013 Apportioned Gross Receipts 50.0000% 100.0000% 10.0000% 58.0328% 50.0000% 61.1364% Apportionment 1,697,500 280,000 1,862,000 3,839,500 (1,700,000) 2,139,500 Modified Gross Receipts 1,700,000 2,500,000 1,900,000 6,100,000 (1,700,000) 4,400,000 Total Sales 850,000 2,500,000 190,000 3,540,000 (850,000) 2,690,000 Michigan Sales 1040 1065 1120-s R/E Holding Operating 2 Operating 1 Sub-Total Elim UBG Michigan Business Tax

34. 6,210 - 2,248 8,820 - 2,700 Tax After Non-Refundable Cr - - - - - - -Community Foundation (12,490) (1,568) 8,333 (16,741) (7,801) -Small Business - - -Research & Development - (1,165) (2,435) (13,355) (7,802) C&I Credit Used - 7,805 13,355 13,355 Comp & Investment Cr Avail 7,250 7,250 7,250 -Investment 5,550 555 6,105 6,105 -Compensation 7,971 1,165 2,435 16,589 7,802 Limitation - 52% B4 Srchg Non-Refundable Credits 18,700 2,733 5,712 38,916 (20,614) 18,303 Liability Before Credits 3,371 493 1,030 7,015 (3,716) 3,299 Surcharge @ 21.99% 15,329 2,240 4,682 31,901 (16,898) 15,003 Total MBT Before Surcharge 8,539 - 3,193 14,076 (9,536) 4,539 Income Tax @ 4.95% 172,500 (500,000) 64,500 284,361 (192,656) 91,705 Business Income Tax Base 172,500 (500,000) 64,500 284,361 (192,656) 91,705 Apportioned Business Income 50.0000% 100.0000% 10.0000% 58.0328% 50.0000% 61.1364% Apportionment 345,000 (500,000) 645,000 490,000 (340,000) 150,000 Business Income Tax Base R/E Holding Operating 2 Operating 1 Sub-Total Elim UBG Michigan Business Tax