Form 4590 - Michigan Business Tax Annual Return For Financial Institutions

○ Interest, dividends, and other income from investment

ii. Net gains, not less than zero, from the sale of loans and

assets and activities and from trading assets and

other intangibles.

activities, including, but not limited to, investment

iii. Net gains, not less than zero, from trading in stocks, bonds,

securities; trading account assets; federal funds;

or other securities.

securities purchased and sold under agreements

iv. Interest charged to customers for carrying debit balances of

to resell or repurchase; options; futures contracts;

margin accounts.

forward contracts; notional principal contracts such

v. Interest and dividends received.

as swaps; equities; and foreign currency transactions

vi. Any other gross proceeds resulting from the operation as a

are in Michigan if the average value of the assets is

financial institution.

assigned to a regular place of business of the taxpayer

For a UBG that includes financial institutions, gross business

in Michigan. Interest from federal funds sold and

purchased and from securities purchased under resale

includes gross business in Michigan of every financial

agreements and securities sold under repurchase

institution included in that UBG without regard to whether the

financial institution has nexus in Michigan. Gross business

agreements are in Michigan if the average value of

between financial institutions included in a UBG must be

the assets is assigned to a regular place of business of

the taxpayer in Michigan. The amount of receipts and

eliminated in calculating the gross business factor.

other income from investment assets and activities is

Gross business is determined to be in Michigan under

in Michigan if assets are assigned to a regular place of

extensive guidelines found at MCL 208.1269. These guidelines

business of the taxpayer in Michigan.

are summarized as follows:

○ The amount of receipts from trading assets and

• Receipts from credit card receivables including interest and

activities, including, but not limited to, assets and

activities in the matched book, in the arbitrage book,

fees or penalties in the nature of interest from credit card

and foreign currency transactions, but excluding

receivables and receipts from fees charged to credit card

amounts otherwise sourced in this section, are in

holders such as annual fees are in Michigan if the billing

Michigan if the assets are assigned to a regular place of

address of the credit card holder is located in Michigan.

business of the taxpayer in Michigan.

• Credit card issuer’s reimbursement fees are in Michigan

• Interest charged to customers for carrying debit balances

if the billing address of the credit card holder is located in

on margin accounts without deduction of any costs incurred

Michigan.

in carrying the accounts is in Michigan if the customer is

• Receipts from merchant discounts are in Michigan if the

located in Michigan.

commercial domicile of the merchant is in Michigan.

• Interest from loans secured by real property is in Michigan

• Loan servicing fees are in Michigan under any of the

if the property is located in Michigan, if the property is

following circumstances:

located both within Michigan and one or more other states

○ For a loan secured by real property, if the real property

and more than 50 percent of the fair market value of the real

property is located in Michigan, and if more than 50 percent

for which the loan is secured is in Michigan.

○ For a loan secured by real property, if the real property

of the fair market value of the real property is not located

within any one state but the borrower is located in Michigan.

for which the loan is secured is located both in

• Interest from loans not secured by real property is in

Michigan and in one or more other states and more than

50 percent of the fair market value of the real property

Michigan if the borrower is located in Michigan.

is located in Michigan.

• Net gains from the sale of loans secured by real property

○ For a loan secured by real property, if more than 50

or mortgage service rights relating to real property are in

percent of the fair market value of the real property for

Michigan if the property is in Michigan, if the property is

which the loan is secured is not located within any one

located both within Michigan and one or more other states

and more than 50 percent of the fair market value of the real

state but the borrower is located in Michigan.

property is located in Michigan, or if more than 50 percent

○ For a loan not secured by real property, the borrower is

of the fair market value of the real property is not located in

located in Michigan.

any one state, but the borrower is located in Michigan.

• Receipts from services are in Michigan if the recipient of the

• Net gains from the sale of loans not secured by real property

services receives all of the benefit of the services in Michigan.

or any other intangible assets are in Michigan if the

If the recipient of the services receives some of the benefit

depositor or borrower is located in Michigan.

of the services in Michigan, the receipts are included in the

• Receipts from the lease of real property are in Michigan if

numerator of the apportionment factor in proportion to the

extent that the recipient receives benefit of the services in

the property is located in Michigan.

• Receipts from the lease of tangible personal property are in

Michigan.

• Receipts from investment assets and activities and trading

Michigan if the property is located in Michigan when it is

first placed in service by the lessee.

assets and activities, including interest and dividends,

are in Michigan if the financial institution’s customer is

• Receipts from the lease of transportation tangible personal

in Michigan. If the location of the financial institution’s

property are in Michigan if the property is used in Michigan

customer cannot be determined, both of the following apply:

or if the extent of use of the property in Michigan cannot

Form 4590 - Michigan Business Tax Annual Return For Financial Institutions - 2013 Page 5

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