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

Mich. Comp. Laws § 206.621 (2026)

Nexus; "actively solicits" and "physical presence" defined.

✓ current as of July 2026
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INCOME TAX ACT OF 1967


Act 281 of 1967


206.621 Nexus; "actively solicits" and "physical presence" defined.

Sec. 621.

    (1) Except as otherwise provided in this part, a taxpayer has substantial nexus in this state and is subject to the tax imposed under this part if the taxpayer has a physical presence in this state for a period of more than 1 day during the tax year, if the taxpayer actively solicits sales in this state and has gross receipts of $350,000.00 or more sourced to this state, or if the taxpayer has an ownership interest or a beneficial interest in a flow-through entity, directly, or indirectly through 1 or more other flow-through entities, that has substantial nexus in this state.

    (2) As used in this section:

    (a) "Actively solicits" means either of the following:

    (i) Speech, conduct, or activity that is purposefully directed at or intended to reach persons within this state and that explicitly or implicitly invites an order for a purchase or sale.

    (ii) Speech, conduct, or activity that is purposefully directed at or intended to reach persons within this state that neither explicitly nor implicitly invites an order for a purchase or sale, but is entirely ancillary to requests for an order for a purchase or sale.

    (b) "Physical presence" means any activity conducted by the taxpayer or on behalf of the taxpayer by the taxpayer's employee, agent, or independent contractor acting in a representative capacity. Physical presence does not include the activities of professionals providing services in a professional capacity or other service providers if the activity is not significantly associated with the taxpayer's ability to establish and maintain a market in this state.

History: Add. 2011, Act 38, Eff. Jan. 1, 2012 ;-- Am. 2011, Act 187, Eff. Jan. 1, 2012

Notes of Decisions
Cited in 4 cases (1 in the last 5 years), 2018–2024 · leading case: Apex Labs. Int'l Inc v. City of Detroit (Mich. Ct. App. 2018).
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Apex Labs. Int'l Inc v. City of Detroit (Mich. Ct. App. 2018). · cites it 3× “Additionally, the Tribunal noted the uncontested fact that Apex was not engaged in the sale of any goods or services in Detroit (or indeed, anywhere), and declined to find that a physical presence or substantial nexus existed between Apex and Detroit based on the use of a…”
Apex Labs. Int'l Inc v. City of Detroit (Mich. Ct. App. 2018). · cites it 3× “Additionally, the Tribunal noted the uncontested fact that Apex was not engaged in the sale of any goods or services in Detroit (or indeed, anywhere), and declined to find that a physical presence or substantial nexus existed between Apex and Detroit based on the use of a…”
Apex Labs. Int'l Inc v. City of Detroit (Mich. Ct. App. 2020). “]” The parties and the Tribunal relied on as persuasive the definition of “physical presence” found in the Michigan Income Tax Act, MCL 206.621(2)(b); however, the Tribunal’s analysis of Apex’s physical presence was based on the applicability of the physical presence rule in…”
D Apex Labs. Int'l Inc v. City of Detroit (Mich. Ct. App. 2024). “Moreover, the Tribunal noted that to the extent Apex employed professional consultants, this fell under the exclusion found in MCL 206.621(2)(b). We agree, as the record shows that the use of professional consultants, such as law firms and marketing consultants, was done to…”
— Mich. Comp. Laws § 206.621(2)(b) — 4 cases
Apex Labs. Int'l Inc v. City of Detroit (Mich. Ct. App. 2018). “Additionally, the Tribunal noted the uncontested fact that Apex was not engaged in the sale of any goods or services in Detroit (or indeed, anywhere), and declined to find that a physical presence or substantial nexus existed between Apex and Detroit based on the use of a…”
Apex Labs. Int'l Inc v. City of Detroit (Mich. Ct. App. 2018). “Additionally, the Tribunal noted the uncontested fact that Apex was not engaged in the sale of any goods or services in Detroit (or indeed, anywhere), and declined to find that a physical presence or substantial nexus existed between Apex and Detroit based on the use of a…”
Apex Labs. Int'l Inc v. City of Detroit (Mich. Ct. App. 2020). “]” The parties and the Tribunal relied on as persuasive the definition of “physical presence” found in the Michigan Income Tax Act, MCL 206.621(2)(b); however, the Tribunal’s analysis of Apex’s physical presence was based on the applicability of the physical presence rule in…”
D Apex Labs. Int'l Inc v. City of Detroit (Mich. Ct. App. 2024). “Moreover, the Tribunal noted that to the extent Apex employed professional consultants, this fell under the exclusion found in MCL 206.621(2)(b). We agree, as the record shows that the use of professional consultants, such as law firms and marketing consultants, was done to…”
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