On March 31, 2016, the Michigan Court of Appeals issued its decision in LaBelle Management, Inc. v. Dep’t of Treasury, in which it reversed a decision of the Court of Claims. The Court of Appeals held that the taxpayer was not part of the same unitary business group with two entities for Michigan Business Tax (“MBT”) purposes due to the absence of more than 50 percent direct or indirect ownership or control.

The Court of Appeals rejected the Treasury and the Court of Claims’ use of attribution (or constructive ownership) rules to conclude that the control test had been satisfied.


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