Michigan Business Tax Filing Requirements
Michigan business tax filing requirements includes annual filing, business tax, business income tax extensions, and doing business in other states.4 min read
2. The Michigan Business Tax
3. Michigan Business Income Tax Extensions
4. Doing Business in Other States
Michigan business tax filing requirements are sometimes difficult to follow. It includes Michigan corporation & limited liability company (LLC) annual filing requirements, Michigan business tax, Michigan business income tax extensions, and carrying out business in other states.
Michigan Corporation and LLC Annual Filing Requirements
- The deadline for paying your business tax is April 30 or the end of the fourth month following the end of the tax year.
- You are required to file an annual statement for your LLC in the state of Michigan.
- Annual Statements must be filed each year no later than February 15. However, a new LLC formed after September 30 does not need to file until the following February 15.
- Your registered agent will receive the pre-printed annual statement form about three months before the due date or you can complete it online.
- It costs $25 to file a Profit Corporation Annual Report and $20 to file a Non-Profit Corporation Annual Report. The cost of filing an annual statement for a Michigan LCC is $25.
- The penalty for late filing is $10 per month or part month with a maximum of $50. These penalties are applied from May 16.
- You can file your annual report online for which a Visa or Mastercard is necessary.
- The corporation's registered agent will receive the pre-printed report at their registered address.
- If you do not file for an update then your corporation will be dissolved or withdrawn. Before this happens, the notice of dissolution or revocation and information about the missing updates will be sent to the corporation's registered agent.
- Profit annual reports must be filed no later than May 15 and Non-profit annual reports must be filed no later than October 1.
- Online filing is available 90 days before the due date of the report or statement. To access the form you will need your LLC's state-issued entity ID number.
- To complete the Annual Statement form you need your resident agent's name and address as well as your limited liability company's registered address.
- As a pass-through tax entity, most LLC's do not pay federal income taxes as responsibility for this falls on their individual members.
- Although some states apply a separate tax on LLCs for carrying out business there, Michigan does not.
- If preferred, an LLC company can choose to be taxed as a corporation by filing an IRS Form 2553.
The Michigan Business Tax
The new law means that business income will be now taxed at 4.95 percent, the tax base being federal taxable income from business activity. Special provisions result in various taxpayers, such as construction contractors and auto dealers, have a reduced tax base as Business Income Tax and Modified Gross Receipt Tax will now be based on sales in Michigan.
A 21.99 percent surcharge is imposed and applies to the Michigan Business Tax liability generated by the Business Income Tax and Modified Gross Receipts Tax before any credit reductions. This will not exceed $6 million for any one taxpayer.
The Modified Gross Receipts Tax of 0.8 percent applies to all of the company's gross receipts excluding any purchases from other firms or tax collected by the business. These purchases include:
- Inventory that was purchased during the tax year and other depreciable assets.
- Materials and supplies (this includes repair parts and fuel.)
- Compensation of staff supplied to customers of a staffing company.
- Payments by certain contractors to subcontractors.
Michigan Business Income Tax Extensions
Four-month business extensions can be granted which gives you an additional 4 months after the end of your tax year. You can apply for this by filing Form 4 prior to your original deadline. Payment of your tax balance must still be made on time or penalties will have to be paid even if you are granted this extension. If tax is owed, then this must be paid with your Form 4 application. The Federal tax extension (IRS Form 7004) will not extend the deadline for your Michigan business filing.
Doing Business in Other States
If you carry out business in other states then you may need to register your LLC in those states. You need to find out the rules for the state where you are carrying out business. If you use another state as a business location, hire employees, or advertise your business there, you are likely to be regarded as doing business in that state. To register an out-of-state business, you will probably need a certificate of authority or similar document from that state.
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