Tax Clearance No Longer Required Prior to Dissolution or Withdrawal in Michigan
Michigan Senate Bill Nos. 593, 594 and 595, which amend the General Sales Tax Act, the Use Tax Act and the
Income Tax Act of 1967, respectively, were enacted on October 10, 2002. The bills became effective immediately. The primary
effect of the new bills is that corporations are now required to request a tax clearance certificate from the Department of
Treasury within 60 days after filing a Certificate of Dissolution or Application for Certificate of Withdrawal with the
Department of Consumer and Industry Services. If a corporation fails to request the tax clearance certificate within that
time period, the Treasury Department will impose the same penalties that a corporation would be subject to for failure to
file a tax return.
Under the former Sales, Use and Income Tax Acts, the Department of Consumer and Industry Services was required to withhold a
Certificate of Dissolution or Certificate of Withdrawal from a corporation until it determined that the corporation did not
owe any sales, use or income taxes. As a result, the dissolution and withdrawal processes were lengthy and complex. The new
bills seek to simplify the dissolution and withdrawal processes by separating them from the tax clearance process. In
addition, Senate Bill No. 593 provides that if a corporation fails to file any sales tax returns or to pay any taxes that are
due, any of the corporation's officers that have control of, or supervision of, or responsibility for making the returns and
payments are personally liable for the failure. To view the full text of Senate Bill Nos. 593, 594 or 595, go to:
http://www.michiganlegislature.org/mileg.asp?page=Bills
New Certificate of Dissolution and Application for Certificate of Withdrawal forms reflecting the tax clearance change will be available at www.incspot.com as soon as the forms are issued by the Department of Consumer and Industry Services.
Please contact a CSC Customer Service Representative at 800-927-9800 if you have any questions about the changes or new filing requirements.
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