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Michigan Court of Appeals enforces mandate allowing IBM to make three-factor apportionment election

The Michigan Court of Appeals has held that the Michigan Court of Claims erred when it failed to issue an order granting summary disposition in favor of International Business Machines Corp. (IBM) on remand as specifically instructed by the Michigan Supreme Court. The Michigan Supreme Court’s decision had held that IBM could elect to use the Multistate Tax Compact’s equally weighted three-factor apportionment formula for the 2008 tax year. Contrary to the Michigan Supreme Court’s instructions, the Court of Claims had entered an order granting summary disposition in favor of the Michigan Department of Treasury. The Court of Appeals’ decision does not extend to other taxpayers currently litigating the validity of the Compact.

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