Michigan's Treatment of Flow-Through Entities Under Its New Corporate Income Tax Nexus Standards

The Bloomberg BNA Tax Management Weekly State Tax Report filters through current state developments and analyzes those critical to multistate tax planning.

In this article, the first of two on nexus standards for flow-through entities, Lynn A. Gandhi of Honigman Miller Schwartz and Cohn examines a recent Michigan Revenue Administrative Bulletin that provides taxpayers guidance on nexus standards under Michigan's relatively new corporate income tax. She highlights that the state's nexus standard is very aggressive for flow-through entities and their nonresident owners, and is incongruous with current case law. In the second of two articles, which will be published later this month, Bruce P. Ely and William T. Thistle, II of Bradley Arant Boult Cummings LLP will examine several of the more interesting and noteworthy nonresident nexus cases and administrative rulings that have come out in the last three years from other states.