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MI HB5484
Bill
Status
1/27/2026
Primary Sponsor
Mark Tisdel
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AI Summary
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Updates Michigan's Income Tax Act of 1967 to modernize sourcing and apportionment rules for flow-through entities (partnerships, S corporations, LLCs), effective January 1, 2026
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Changes the method for sourcing sales of tangible personal property from origin-based to destination-based, attributing sales to where property comes to rest at its ultimate destination
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Establishes detailed market-based sourcing rules for services, requiring receipts to be attributed to Michigan based on where the customer receives the benefit of services rather than where services are performed
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Creates specific sourcing rules for financial services including loans, credit cards, securities brokerage, and investment activities, generally attributing receipts based on customer or borrower location in Michigan
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Repeals seven existing sections (MCL 206.111, 206.113, 206.114, 206.131, 206.132, 206.133, and 206.134) related to outdated allocation methods including property factor, payroll factor, and prior apportionment formulas
Legislative Description
Individual income tax: flow-through entities; sourcing and apportionment provisions; update. Amends secs. 102, 103, 105, 110, 112, 115, 122 & 123 of 1967 PA 281 (MCL 206.102 et seq.) & repeals secs. 111, 113, 114, 131, 132, 133 & 134 of 1967 PA 281 (MCL 206.111 et seq.).
Individual income tax: flow-through entities
Last Action
Bill Electronically Reproduced 01/27/2026
1/28/2026