MI SB1298

Expands withholding requirements for flow-through entities with more than $200,000 in Michigan business income to withhold taxes on corporate and other flow-through entity members' distributive shares at the rate prescribed in section 623.

Allows flow-through entities to exempt members (other than nonresident individuals) from withholding if they complete an exemption certificate, file required returns, pay their own taxes, and submit to Michigan tax jurisdiction.

Permits a flow-through entity that is itself a member of another flow-through entity subject to withholding to withhold on its members' business income shares, with the department applying upstream withholding to downstream withholding obligations.

Requires exemption certificates claiming more than 9 exemptions or exempt status to be submitted to the department by the fifteenth day of the following month, and allows the department to revoke exemption elections for non-compliance.

Effective January 1, 2013 for all business activity occurring after December 31, 2012.