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Abstract

This note will explore some of the major provisions of the Michigan Single Business Tax Act (SBTA), focusing upon those areas Michigan has treated in a manner different from that of other states. Initially, the various types of state business taxes will be introduced. Each tax's strengths and weaknesses will be explored so that the SBTA can be evaluated in relation to the other types of taxes the Michigan legislature might have chosen. Next, the note will address the problem of the allocation of income of multistate businesses. There are also the questions of how to define "taxable income" and the "persons" to be taxed. The SBTA responds to those questions with new and very different concepts. Finally, the strengths and weaknesses of the SBTA in each of these areas will be compared with the Ohio scheme of business taxation and, to some extent, the federal income tax. Hopefully, this comparison will reveal some of the deficiencies in the Ohio tax and, ultimately, answer the question of whether or not a tax such as the SBTA is suitable for use in Ohio and other states.

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