206.805 Definitions; F to M.

473 words·~2 min read·/mi/chapter-206/206-805

A research copy — for the controlling text, always check the official state or federal source. Not legal advice.

Sec. 805.

(1)"Federal taxable income" means taxable income as defined in section 63 of the internal revenue code without the deductions described under section 703(a)(2) of the internal revenue code and federal taxable income must also be calculated in the following manner under the following circumstances:

(a)For tax years beginning after December 31, 2021, as if the transition rules under section 70302 of Public Law 119-21, including, but not limited to, any provisions related to the application of section 174A of the internal revenue code, do not apply.

(b)For tax years beginning after December 31, 2024, as if both of the following conditions applied, subject to any necessary adjustments under subparagraph (iii):

(i)Sections 168(n) and 174A of the internal revenue code were not in effect.

(ii)Sections 163(j), 168(k), 174, and 179 of the internal revenue code applied as those provisions were in effect on December 31, 2024.

(iii)The state treasurer shall, if necessary, modify the application of any references in the internal revenue code to the sections identified in subparagraphs

(i)and

(ii)in a reasonable manner to carry out the purpose of this subdivision, including, but not limited to, modifying the application of section references that were amended under Public Law 119-21.

(c)For the purposes of this part in computing federal taxable income under this subsection, an S corporation is treated as a corporation under section 1361(a)(2) of the internal revenue code and a partnership is treated as an association taxable as a corporation pursuant to an election under 26 CFR 301.7701-3(a).

(2)"Financial institution" means that term as defined in section 651.

(3)"Flow-through entity" means an entity that for the applicable tax year is treated as an S corporation or a partnership under the internal revenue code for federal income tax purposes. Flow-through entity does not include a publicly traded partnership, any entity disregarded or treated as a corporation under section 845, or any person subject to the tax imposed under chapter 13.

(4)"Insurance company" means that term as defined in section 607.

(5)"Internal revenue code" means the United States internal revenue code of 1986 in effect on January 1, 2025 or, at the option of the taxpayer, in effect for the tax year.

(6)"Member", when used in reference to a flow-through entity, means a shareholder of an S corporation or a partner or member in a partnership.

History: Add. 2021, Act 135 , Imd. Eff. Dec. 21, 2021 ;-- Am. 2024, Act 177 , Imd. Eff. Dec. 23, 2024 ;-- Am. 2025, Act 24 , Imd. Eff. Oct. 7, 2025

Compiler's Notes: Enacting section 1 of Act 135 of 2021 provides:"Enacting section 1. This amendatory act is retroactive and intended to apply retroactively effective for tax years beginning on and after January 1, 2021."