What persons or activities are exempt from the SBT?
The following may be exempt from the SBT. Each of these exemptions, however, has some restrictions. • Most persons, other than non-US persons, who are exempt from federal income tax under the Internal Revenue Code. • Nonprofit cooperative housing corporations. • Production of agricultural goods, if the taxpayer’s primary activity is production of agricultural goods. • Partners of partnerships and shareholders of Sub S corporations (unless they have other business activities). Partnerships and Sub S corporations, however, are subject to the SBT. Partners and shareholders should contact the Individual Taxes Division at (800) 827-4000 for information on Michigan income tax filing requirements. Who is subject to the SBT? All persons engaged in a “business activity” in Michigan are subject to the SBT. A “person” includes an individual, trust, estate, and every type of business entity. Persons engaged in “business activity” both within and without the State of Michigan should refer to RAB 98
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