Chocola v. Department of Treasury

We granted leave in these cases to resolve a conflict among panels of the Court of Appeals regarding the taxability of Michigan residents on their distributable income shares in out-of-state subchapter S corporations. The Department of Treasury has taken the position that such distributable shares are nonbusiness dividend income, fully taxable in this state and ineligible for a statutory tax credit for income tax paid to the corporate-situs state. The Court of Appeals ap proved that treatment in Wilson v Dep’t of Treasury, 122 Mich App 711; 333 NW2d 3 (1982); however, a contrary result was…