Tad Malpass v. Department of Treasury

In these consolidated cases, we address the application of Michigan’s statutory apportionment formula for individuals with flow-through business income under the Michigan Income Tax Act (ITA). In both cases, the individual taxpayers received income from in-state and out-of-state, flow-through businesses. The Michigan Department of Treasury (Department) refused the taxpayers’ attempts to combine the flow-through income from their respective businesses and then apportion the income using the businesses’ combined apportionment factors, and instead required the income of each entity to be…