CITY INCOME TAX ACT
Act 284 of 1964
141.624 Partial business activity in city; business allocation percentage.
Sec. 24.
Fourth, the taxpayer shall add the percentages determined in accordance with sections 21, 22 and 23 and divide the total by 3 and the result so obtained is the business allocation percentage. In determining this percentage, a factor shall be excluded from the computation only when the factor does not exist anywhere insofar as the taxpayer's business operation is concerned and, in such case, the total of the percentages shall be divided by the number of factors actually used. The business allocation percentage shall be applied to the entire net profits, wherever derived, of the taxpayer subject to the tax to determine the net profits allocable to the city.
History: 1964, Act 284, Imd. Eff. June 12, 1964 ;-- Am. 1969, Act 42, Imd. Eff. July 17, 1969
Notes of Decisions
Andersons Albion Ethanol LLC v. Dep't of Treasury, 893 N.W.2d 642 (Mich. Ct. App. 2016).
“[MCL 141.624 (emphasis added).] *215 It is clear from this provision that the Legislature is aware of a method to alter a tax formula’s denominator in response to missing factors in the formula’s numerator.”
Honigman Miller Schwartz & Cohn LLP v. City of Detroit (Mich. 2020).
· cites it 6× “To arrive at that number, MCL 141.624 requires a business to calculate taxable net profit from business activity within a city— the business allocation percentage—by calculating the property factor under MCL 141.”
Apex Labs. Int'l Inc v. City of Detroit (Mich. Ct. App. 2024).
· cites it 5× “] Further, [w]hen the entire net profit of a business subject to the tax is not derived from business activities exclusively within the city, the portion of the entire net profit, earned as a result of work done, services rendered or other business activity conducted in the…”
Honigman Miller Schwartz & Cohn LLP v. City of Detroit (Mich. Ct. App. 2018).
· cites it 2× “620 through MCL 141.624. 4 MCL 141.624. -1- the city,5 (2) the payroll factor under § 22, considers what percentage of the payroll is attributable to “work done or services performed within the city,”6 and (3) the sales factor under § 23, considers the gross revenue “derived…”
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