Are limited liability companies subject to the MBT?
The following answer has been rescinded and replaced by Mi28. Yes. Under the MBT, taxpayer means “a person or a unitary business group liable for a tax, interest, or penalty.” MCL 208.1117(5). “Person” means “an individual, firm, bank, financial institution, insurance company, limited partnership, limited liability partnership, copartnership, partnership, joint venture, association, corporation, subchapter S corporation, limited liability company, receiver, estate, trust, or any other group or combination of groups acting as a unit.” MCL 208.1113(3) (emphasis added). Thus, a limited liability company is a taxpayer subject to the MBT. However, to the extent that a limited liability company is a single member limited liability company disregarded for federal tax purposes, then the owner of that limited liability company will be the taxpayer under the MBT. The disregarded single member limited liability company will be treated as a sole proprietorship, branch, or division of its owner.
