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5114, Page 2

Instructions for the Corporate Income Tax Affiliated Group Election

to File as a Unitary Business Group (Form 5114)

Purpose

Control Test

A taxpayer wishing to make the affiliated group election

The control test is satisfied when one person owns or

to file as a Unitary Business Group (UBG) under the

controls, directly or indirectly, more than 50 percent of

Corporate Income Tax (CIT) must file this form with

the ownership interest with voting or comparable rights of

the Michigan Department of Treasury (Treasury). The

the other person or persons. A person owns or controls

election allows a group of persons that satisfy the

more than 50 percent of the ownership interest with voting

definition of “affiliated group,” (see below) to elect to be

rights or ownership interest that confer comparable rights

treated as a UBG even if those persons do not satisfy the

to voting rights of another person if that person owns or

relationship test. This election, once made, is irrevocable

controls:

and binding for the tax year of the election and the

• More than 50 percent of the total combined voting

subsequent nine tax years (a total of 10 years).

power of all ownership interests with voting (or

comparable) rights, or

Instructions

• More than 50 percent of the total value of all ownership

For purposes of this form, “affiliated group” means that

interests with voting (or comparable) rights.

term as defined in section 1504 of the internal revenue

code except that it shall include all United States persons

Filing Procedures for UBGs

that are corporations, insurance companies, or financial

By definition, a UBG can include standard taxpayers,

institutions, other than a foreign operating entity, that are

insurance companies, and financial institutions. (Note

commonly owned, directly or indirectly, by any member of

that an entity that would otherwise be standard but is

such affiliated group and other members of which more

owned by and unitary with a financial institution is defined

than 50 percent of the ownership interests with voting

by statute to be a financial institution.) In some cases,

rights or ownership interests that confer comparable

however, not all members of the UBG will be included

rights to voting rights of the member is directly or

on the same return. Standard members (not owned by

indirectly owned by a common owner or owners.

and unitary with a financial institution in the UBG) file a

A group of persons that satisfies the definition of an

combined return on the Corporate Income Tax Annual

affiliated group may elect to have all persons included

Return (Form 4891). The Data on UBG Members (Form

in that group treated as a UBG, within the definition, for

4897) must be filed in support of that return. Financial

purposes of filing the CIT, even if those persons do not

institution members will report and combine their data

satisfy the relationship test of MCL 206.611(6). For more

using the UBG Combined Filing Schedule for Financial

information on the relationship test see the Michigan CIT

Institutions (Form 4910), which supports the lead financial

Unitary Business Group Affiliates Excluded from the

form, CIT Annual Return for Financial Institutions (Form

Return of Standard Taxpayers (Form 4896) or go online to

4908). Insurance Companies file stand-alone returns

The group of persons need

on the Insurance Company Annual Return for Corporate

not request permission from Treasury to make the election

Income and Retaliatory Taxes (Form 4905).

but must file this form.

Mailing Address

Each person in the affiliated group is deemed to have

agreed to be bound by the election and any renewal

Complete and mail this form to:

of that election and is considered to have waived any

Tax Processing Bureau

objection to that person’s inclusion in the affiliated group.

Business Taxes Division

Any person that subsequently enters the affiliated group

Michigan Department of Treasury

during the period of an election is also deemed to have

PO Box 30427

consented and is bound by the election.

Lansing, MI 48909

This election is irrevocable and binding for the tax year

for which it is made and the subsequent nine tax years

Retain a copy for your records.

(a total of 10 tax years). A taxpayer may not amend to

rescind the affiliated group election. The election may be

renewed at the expiration of ten years by filing this form

anew with Treasury. If however, the group chooses not to

renew at the expiration of ten years, it will be prohibited

from creating a new election for a period of three tax

years.

Instructions For The Corporate Income Tax Affiliated Group Election To File As A Unitary Business Group (Form 5114) - Michigan Department Of Treasury

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