May taxpayers, including corporations and partnerships, take the IRC 199 deduction for MBT purposes?
The following answer has been rescinded and replaced by M68. MBT taxpayers that are taxable as corporations that qualify for an IRC 199 deduction on their federal tax return will automatically experience a corresponding reduction in their business income tax base and MBT liability. MBT taxpayers that are pass-through entities are not entitled to take the IRC 199 deduction at the entity level, but rather the deduction is taken at the shareholder, member, or partner level for Michigan income tax purposes. The domestic production activities deduction under IRC 199 provides a tax benefit for certain domestic production activities. In particular, IRC 199 allows a deduction equal to a specified percentage of the taxpayer’s qualified production activities income for the tax year. The specified percentage is 6% for 2008-2009, and 9% thereafter. The deduction is available to corporations, individuals, estates, and trusts that are engaged in certain domestic trade or business activities. For pas
