New Michigan Business Tax Changes Now in Effect

By Eric Geringswald | CSC

Key Business Tax Changes in Michigan

Michigan lawmakers approved changes to several of the state’s business tax statutes:

• Income tax on flow-through entity members — The Department of Treasury may require reasonable proof from a taxpayer related to the allocated share of tax paid by a flow-through entity claimed for a credit under Section 206.675, the direct or indirect flow-through entities required to report under Section 839(1)(d), or any other information required by the department for the administration of this section.

• Income tax — LLCs — A person that converts into an LLC under Section 7 of 1883 PA 129, MCL 484.7, is treated as a corporation for purposes of Parts 2 and 3 of the Income Tax Act of 1967 (Chapter 206), unless that converted entity is a disregarded entity for federal income tax filing purposes under the Internal Revenue Code and its regarded owner is treated as a corporation for state and federal income tax purposes.

• Income tax — Research and development credits — Authorized businesses with 250 or more employees can claim a credit equal to 3% of the taxpayer’s qualifying research and development expenses incurred during the calendar year, up to the average annual amount of qualifying R&D expenses incurred during the preceding three calendar years, and 10% of the taxpayer’s qualifying R&D expenses incurred during the calendar year in excess of the base amount. The credit may not exceed $2 million per tax year per taxpayer.

Authorized businesses with fewer than 250 employees may also claim a credit equal to 3% of the taxpayer’s qualifying R&D expenses incurred during the calendar year, up to the average annual amount of qualifying R&D expenses incurred during the preceding three calendar years, and 15% of the taxpayer’s qualifying R&D expenses incurred during the calendar year in excess of the base amount. The credit may not exceed $250,000 per tax year per taxpayer.

Find These Changes in the 2025 Edition of Michigan Laws Governing Business Entities Annotated

These and other changes are captured in the 2025 edition of Michigan Laws Governing Business Entities Annotated. The 2025 edition features the full text of Chapter 499 (Partnerships) and Chapter 450 (Corporations) from the Michigan Compiled Laws Service, updated through Act 2 of the 2025 legislative session. Also included are related sections covering taxation, trademarks, securities and civil procedures, as well as Articles 1, 8 and 9 of the Uniform Commercial Code. The book’s Table of Sections Affected provides a list of all changes coming out of the latest legislative session, and legislative analysis summarizes changes to the law.

Case Notes, Filing Fees and Forms for Michigan Business Entities

The book is fully annotated with the latest case notes from state and federal courts interpreting the law. There is also a comprehensive fee schedule with business services filing fees from Michigan’s Licensing and Regulatory Affairs Corporations Division.

Users can access more than 60 Michigan forms for incorporation and formation, qualification, mergers, dissolution and name reservation for all entity types via the LexisNexis® Store download center. A listing of forms and contact information for the Corporations Division is included in the book’s appendix.

Available in Print and Digital Formats

Michigan Laws Governing Business Entities Annotated is available as a softbound book or as an e-book, compatible with dedicated e-reader devices, computers, tablets and smartphones that use e-reader software or applications. It is also available on the LexisNexis® Digital Library.

Learn More or Order the 2025 Edition Today

To learn more about the 2025 edition of Michigan Laws Governing Business Entities Annotated, call 800-533-1637 or visit lexisnexis.com/csc.