Section 208.1107 - Definitions; "C" and "D".
MICHIGAN BUSINESS TAX ACT (EXCERPT)
Act 36 of 2007
208.1107 Definitions; "C" and "D".
Sec. 107.
(1) "Client" means an entity whose employment operations are managed by a professional employer organization.
(2) "Compensation" means all wages, salaries, fees, bonuses, commissions, other payments made in the tax year on behalf of or for the benefit of employees, officers, or directors of the taxpayers, and any earnings that are net earnings from self-employment as defined under section 1402 of the internal revenue code of the taxpayer or a partner or limited liability company member of the taxpayer. Compensation includes, but is not limited to, payments that are subject to or specifically exempt or excepted from withholding under sections 3401 to 3406 of the internal revenue code. Compensation also includes, on a cash or accrual basis consistent with the taxpayer's method of accounting for federal income tax purposes, payments to a pension, retirement, or profit sharing plan other than those payments attributable to unfunded accrued actuarial liabilities, and payments for insurance for which employees are the beneficiaries, including payments under health and welfare and noninsured benefit plans and payment of fees for the administration of health and welfare and noninsured benefit plans. Compensation for a taxpayer licensed under article 25 or 26 of the occupational code, 1980 PA 299, MCL 339.2501 to 339.2518 and 339.2601 to 339.2637, includes payments to an independent contractor licensed under article 25 or 26 of the occupational code, 1980 PA 299, MCL 339.2501 to 339.2518 and 339.2601 to 339.2637. Compensation does not include any of the following:
(a) Discounts on the price of the taxpayer's merchandise or services sold to the taxpayer's employees, officers, or directors that are not available to other customers.
(b) Except as otherwise provided in this subsection, payments to an independent contractor.
(c) Payments to state and federal unemployment compensation funds.
(d) The employer's portion of payments under the federal insurance contributions act, chapter 21 of subtitle C of the internal revenue code, 26 USC 3101 to 3128, the railroad retirement tax act, chapter 22 of subtitle C of the internal revenue code, 26 USC 3201 to 3233, and similar social insurance programs.
(e) Payments, including self-insurance payments, for worker's compensation insurance or federal employers' liability act insurance pursuant to 45 USC 51 to 60.
(3) "Corporation" means a taxpayer that is required or has elected to file as a corporation under the internal revenue code.
(4) "Department" means the department of treasury.
History: 2007, Act 36, Eff. Jan. 1, 2008
Compiler's Notes: Enacting section 1 of Act 36 of 2007 provides:"Enacting section 1. This act takes effect January 1, 2008 and applies to all business activity occurring after December 31, 2007."
Popular Name: MBT