Mich. Comp. Laws » Michigan Compiled Laws / Chapter 206 / Act 281 of 1967

Mich. Comp. Laws § 206.110

Taxable income of individuals, estates, or trusts; definitions; allocation; rents and royalties.

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INCOME TAX ACT OF 1967


Act 281 of 1967


206.110 Taxable income of individuals, estates, or trusts; definitions; allocation; rents and royalties.

Sec. 110.

    (1) For a resident individual, estate, or trust, all taxable income from any source whatsoever, except that attributable to another state under sections 111 to 115 and subject to section 255, is allocated to this state.

    (2) For a nonresident individual, estate, or trust, all taxable income is allocated to this state to the extent it is earned, received, or acquired in 1 or more of the following ways:

    (a) For the rendition of personal services performed in this state.

    (b) As a distributive share of the net profits of a business, profession, enterprise, undertaking, or other activity as the result of work done, services rendered, or other business activities conducted in this state, except as allocated to another state pursuant to sections 111 to 114 and subject to section 256.

    (c) For tax years beginning after 1996, as a prize won by the taxpayer under the McCauley-Traxler-Law-Bowman-McNeely lottery act, 1972 PA 239, MCL 432.1 to 432.47.

    (d) As winnings that are proceeds of a wagering transaction paid on or after October 1, 2003 by a casino or as a payoff price on a winning ticket that is the result of pari-mutuel wagering at a licensed race meeting if the casino or licensed race meeting is located in this state. As used in this subdivision:

    (i) "Casino" means a casino regulated by this state under the Michigan gaming control and revenue act, 1996 IL 1, MCL 432.201 to 432.226, or a building on Native American land or land held in trust by the United States for a federally recognized Indian tribe on which gaming is conducted under the Indian gaming regulatory act, Public Law 100-497, 102 Stat 2467.

    (ii) "Pari-mutuel wagering" and "licensed race meeting" mean those terms as used in the horse racing law of 1995, 1995 PA 279, MCL 431.301 to 431.336.

    (3) The respective shares of a nonresident estate or trust and its beneficiaries, including, solely for purposes of allocation, resident and nonresident beneficiaries, in the income attributable to this state shall be in proportion to the respective shares of distributable net income of the beneficiaries under the internal revenue code. If the estate or trust has no distributable net income for the tax year, the share of each beneficiary in the income attributable to this state shall be in proportion to his or her share of the estate or trust income for that year, under local law or the terms of the instrument, that is required to be distributed currently and other amounts of the income distributed in the year. Any balance of the income attributable to this state shall be allocated to the estate or trust.

    (4) Rents and royalties from real or tangible personal property, capital gains, interest, dividends, or patent or copyright royalties, to the extent that they constitute a nonbusiness income, shall be allocated as provided in sections 111 to 114.

History: 1967, Act 281, Eff. Oct. 1, 1967 ;-- Am. 1969, Act 332, Imd. Eff. Nov. 4, 1969 ;-- Am. 1990, Act 283, Imd. Eff. Dec. 14, 1990 ;-- Am. 1996, Act 484, Eff. Jan. 1, 1997 ;-- Am. 2003, Act 21, Imd. Eff. June 24, 2003 ;-- Am. 2011, Act 38, Eff. Jan. 1, 2012

Notes of Decisions
Cited in 16 cases (1 in the last 5 years), 1982–2025 · leading case: Chocola v. Department of Treasury
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Chocola v. Department of Treasury (1985) mich · cites it 3× “[MCL 206.110; MSA 7.557(1110).] Sec. 113. Interest and dividends are allocable to this state if the taxpayer is a resident partnership, estate or trust or individual of this state or has a commercial domicile in this state.”
Tad Malpass v. Department of Treasury (2013) mich “24 MCL 206.110(1). 25 Emphasis added. 26 MCL 206.”
Malpass v. Department of Treasury (2011) michctapp · cites it 4× “” Taking MCL 206.110 and MCL 206.115 together, the court stated: “Clearly, based on the plain language set forth in Sections 110 and 115, the Michigan Legislature has adopted the unitary business principle, because it has chosen to require the apportionment of all business…”
Bachman v. Department of Treasury (1996) michctapp · cites it 3× “[MCL 206.110; MSA 7.557(1110).] Sec. 115. All business income, other than income from transportation services shall be apportioned to this state by multiplying the income by a fraction, the numerator of which is the property factor plus the payroll factor plus the sales factor,…”
Molter v. Department of Treasury (1993) mich · cites it 2× “" MCL 206.110(2)(a); MSA 7.557(1110)(2)(a).”
Alma Piston Co. v. Department of Treasury (1999) michctapp · cites it 2× “(b) As a distributive share of the net profits of a business[ 1 ], profession, enterprise, undertaking, or other activity as the result of work done, services rendered, or other business activities conducted in this state, except as allocated to another state pursuant to the…”
Wisne v. Department of Treasury (2001) michctapp · cites it 2× “[MCL 206.110; MSA 7.557(1110).] [2] Sec. 115.”
Molter v. Department of Treasury (1992) michctapp · cites it 2× “2 In an opinion and order entered on January 2, 1990, the Court of Claims granted in part defendant’s motion for summary disposition, finding that pursuant to § 110 of the Income Tax Act, MCL 206.110(2)(a); MSA 7.557(1110)(2)(a), the deferred compensation that plaintiff…”
Carman v. Department of Treasury (1994) michctapp · cites it 4× “In that chapter, MCL 206.110; MSA 7.557(1110) indicates how taxable income of residents and nonresidents is allocated: (1) In the case of a resident individual, .”
Chocola v. Department of Treasury (1984) michctapp “MCL 206.110(1); MSA 7.557(1110X1). Two of these statutory exceptions are relevant to the instant problem.”
Wilson v. Department of Treasury (1982) michctapp “” MCL 206.110; MSA 7.557(1110). "Interest and dividends are allocable to this state if the taxpayer is a resident partnership, estate or trust or individual of this state or has a commercial domicile in this state.”
Churchill Downs Technology Initiatives Company v. Michigan Gaming Control Board (2025) miwd · cites it 2× “See Mich. Comp. Laws § 206.110 (2)(d) (explaining that winnings on gambling or pari-mutuel races are only considered Michigan-based income when the casino or race “is located in [Michigan]”).”
Show all 16 citing cases →
— Mich. Comp. Laws § 206.110(1) — 5 cases
Tad Malpass v. Department of Treasury (2013) mich “24 MCL 206.110(1). 25 Emphasis added. 26 MCL 206.”
Malpass v. Department of Treasury (2011) michctapp “” Taking MCL 206.110 and MCL 206.115 together, the court stated: “Clearly, based on the plain language set forth in Sections 110 and 115, the Michigan Legislature has adopted the unitary business principle, because it has chosen to require the apportionment of all business…”
Chocola v. Department of Treasury (1984) michctapp “MCL 206.110(1); MSA 7.557(1110X1). Two of these statutory exceptions are relevant to the instant problem.”
Carman v. Department of Treasury (1994) michctapp “In that chapter, MCL 206.110; MSA 7.557(1110) indicates how taxable income of residents and nonresidents is allocated: (1) In the case of a resident individual, .”
Estate of Thomas M Wheeler v. Department of Treasury (2013) mich
— Mich. Comp. Laws § 206.110(2)(a) — 5 cases
Molter v. Department of Treasury (1993) mich “" MCL 206.110(2)(a); MSA 7.557(1110)(2)(a).”
Alma Piston Co. v. Department of Treasury (1999) michctapp “(b) As a distributive share of the net profits of a business[ 1 ], profession, enterprise, undertaking, or other activity as the result of work done, services rendered, or other business activities conducted in this state, except as allocated to another state pursuant to the…”
Molter v. Department of Treasury (1992) michctapp “2 In an opinion and order entered on January 2, 1990, the Court of Claims granted in part defendant’s motion for summary disposition, finding that pursuant to § 110 of the Income Tax Act, MCL 206.110(2)(a); MSA 7.557(1110)(2)(a), the deferred compensation that plaintiff…”
Carman v. Department of Treasury (1994) michctapp “In that chapter, MCL 206.110; MSA 7.557(1110) indicates how taxable income of residents and nonresidents is allocated: (1) In the case of a resident individual, .”
Income Tax Cases (1987) michctapp
— Mich. Comp. Laws § 206.110(2)(b) — 3 cases
Bachman v. Department of Treasury (1996) michctapp “[MCL 206.110; MSA 7.557(1110).] Sec. 115. All business income, other than income from transportation services shall be apportioned to this state by multiplying the income by a fraction, the numerator of which is the property factor plus the payroll factor plus the sales factor,…”
Alma Piston Co. v. Department of Treasury (1999) michctapp “(b) As a distributive share of the net profits of a business[ 1 ], profession, enterprise, undertaking, or other activity as the result of work done, services rendered, or other business activities conducted in this state, except as allocated to another state pursuant to the…”
Wisne v. Department of Treasury (2001) michctapp “[MCL 206.110; MSA 7.557(1110).] [2] Sec. 115.”
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