May a corporation deduct the Michigan business tax or the Texas margin tax?
A corporation may not deduct any component of either the Michigan business tax or the Texas margin tax for Wisconsin franchise or income tax purposes. Corporations compute their Wisconsin net income under the Internal Revenue Code (IRC) as defined for Wisconsin purposes, with certain modifications. One of the modifications is sec. 71.26(3)(g), Wis. Stats. (2005-06), which provides that IRC sec. 164(a) is modified so that state taxes and taxes of the District of Columbia that are value-added taxes, single business taxes, or taxes on or measured by all or a portion of net income, gross income, gross receipts, or capital stock are not deductible. Similar statutory language applies to tax-option (S) corporations. Do the Michigan business tax and the Texas margin tax qualify for the credit for net income tax paid to another state? Both the Michigan business tax and the Texas margin tax qualify for the credit for net income tax paid to another state, if the other requirements of the credit p
