You hired outside Michigan
A single remote employee can establish income/franchise tax nexus, payroll withholding requirements and a sales tax collection obligation in a new state from Day 1.
State & Local Tax | Michigan & Multistate
You've grown into new states, hired people who work from anywhere and picked up customers you can't tie to a single address. Somewhere in that growth you created filing obligations no one has quantified. Our Michigan state and local tax advisers help you identify them before an auditor does, along with the refunds and elections most companies leave on the table.
No cost, no obligation. Simply a 20-minute scoping conversation.
The Problem
Almost no one sets out to become a multistate taxpayer. It happens one hire, one customer and one warehouse at a time. The obligation starts the day the threshold is crossed, not the day you find out.
A single remote employee can establish income/franchise tax nexus, payroll withholding requirements and a sales tax collection obligation in a new state from Day 1.
Most states now assert nexus on economic activity alone. For example, Michigan's threshold is $350,000 of sourced gross receipts, with no office, property or people physically in the state required.
Inventory sitting in a third-party warehouse is your physical presence. Marketplace sales still count toward thresholds even when the platform remits the tax.
Unfiled state returns are the most common surprise in tax due diligence, and successor liability can follow the buyer for years after close.
Sourcing rules for services and intangibles differ by state and change often. Formulas set years ago routinely overstate or understate creating potential refunds or liabilities for the income/franchise tax today.
Nexus questionnaires and audit letters have short clocks. What you say in the first response shapes everything that follows. Talk to state tax professionals before submitting your first response.
There is no statute of limitations on an unfiled return. A state can reach back to the first day you had nexus and assess tax, penalties and interest across every open year. In many states, responsible officers can be held personally liable for uncollected or unremitted sales tax. Exposure that never appears on a balance sheet has a way of appearing in a diligence data room.
Michigan at a Glance
$350K
Michigan-sourced gross receipts that create corporate income tax nexus if you actively solicit sales. More than one day of physical presence triggers it on its own.
100%
Michigan apportions the corporate tax base on a single sales factor, which makes sourcing decisions the whole ballgame.
$100K / 200
Prior-year gross sales or separate transactions that trigger sales and use tax registration for remote sellers.
Our Services
One knowledgeable team across every state you touch, so the nexus answer, the apportionment method and the audit response all align.
A defensible, state-by-state answer to the only question that matters first: where are you actually required to file?
Most overpayments/underpayments we find are not exotic. They are historic sourcing rules applied the way they worked five years ago. A short list below for items to consider:
Taxability is not a setting in your billing system. It is a decision, per product, per state and it needs an owner.
We take the correspondence, manage the auditor relationship and keep the scope where it belongs.
Corporate income tax services and filings handled as one coordinated calendar, not numerous disconnected deadlines.
Planning only works if someone raises it before the structure is locked.
How We Work
You should not have to commit to a full engagement to find out whether you have a problem. Here is how our process works:
We start with a conversation, not a document request list. Where do you sell, where do people work, what moved last year? That is usually enough to tell you whether there is something worth investigating further.
A written view of your filing obligations by state, the exposure quantified by year, the refund/exposure opportunities we identified and a recommended order of operations with costs attached.
We handle the registrations, voluntary disclosures, amended returns and ongoing compliance, and we are the ones who respond when a state writes back.
Who We Work With
Our state and local tax advisory work is a fit for organizations large enough that the exposure is material and lean enough that there is no in-house SALT specialist.
Multistate inventory, 3PL networks and exemption certificate exposure across a long customer list.
Fleets crossing state lines, special apportionment rules and mileage-based sourcing that few generalists handle well.
State tax diligence on the way in, exposure clean-up during the hold and a clean data room on the way out.
Project-based nexus, contractor use tax and entity structures that span a dozen jurisdictions by design.
Market-based sourcing on service revenue, SaaS taxability and a workforce that created nexus the day it went remote.
State filing obligations that flow through to investors, plus sourcing questions specific to management and incentive fees.
Why Cohen & Co®
Most companies in this position are choosing between a national firm that will assign them a manager they never meet, and a local firm that has not handled a 20-state exposure study. That is a false choice.
Whitepaper
Planning items to consider, strategies for managing your company's 2026 tax burden, and a checklist to keep you on track with your advisers, including considerations from the One Big Beautiful Bill Act.
Read moreArticle
How partnerships can record the three most common types of state and local tax payments: nonresident withholding and composite payments, entity-level expenses, and pass-through entity tax.
Read moreArticle
How the Michigan R&D credit works, how it differs from the federal credit, and what to do now to claim the credit by March 2027.
Read moreNext Step
A short conversation can often signal whether you have real exposure, a refund opportunity or are on the right track.
1. Tell us where you operate. Fill out the form. It takes about a minute.
2. Talk with a SALT specialist. A 20-minute call with a state and local tax specialist, not a salesperson.
3. Decide with real information. Leave with a point of view on your risk and a starting point to decide if you want, or need, to go further.
Prefer to call? Detroit: 313.424.4871 | Troy: 248.952.0200
Best suited to businesses with roughly $20 million or more in revenue and operations in more than one state.
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FAQ
SALT services cover every tax a business owes below the federal level: state corporate income and franchise taxes, gross receipts taxes, sales and use tax, personal property tax, and local taxes such as city income tax. The work breaks into four buckets — determining where you are required to file (nexus), calculating how much income each state can tax (apportionment), filing accurately and on time (compliance) and defending those positions when a state challenges them (controversy).
For the Michigan corporate income tax, nexus exists if you have: physical presence in the state for more than one day; you actively solicit sales in Michigan and have $350,000 or more in Michigan-sourced gross receipts; or you hold an ownership interest in a flow-through entity with Michigan nexus. For sales and use tax, a remote seller must register once prior-year gross sales into Michigan exceed $100,000 or 200 separate transactions.
The complication is that these are Michigan's rules only. Every state sets its own, and they rarely match. A nexus study answers the question for all states you touch at once.
Only for financial institutions. Michigan repealed and replaced the Michigan business tax with the corporate income tax, effective January 1, 2012. Under the corporate income tax, most C Corporations pay a corporate income tax on apportioned income, while the remaining Michigan franchise tax applies to financial institutions and is based on total equity capital.
This matters because businesses operating in multiple states often do owe franchise taxes elsewhere — Texas, Delaware, Tennessee and others impose them on bases that have nothing to do with income. A company can be profitable nowhere and still owe franchise tax somewhere.
Apportionment is how a multistate business divides its income among the states that can tax it. Michigan and most states now use a single sales factor: the share of your total sales that is sourced to that state determines the share of income it taxes.
That makes sourcing the whole game. For tangible goods it is usually straightforward. For services, software and intangibles it is not. States often disagree on whether to source to where the work was performed, where the benefit was received or where the customer sits. Getting it wrong in either direction is expensive: over-source and you overpay, under-source and you build an assessment.
Yes, and the sooner the better. State tax audit defense is a core part of our practice, and the first response typically sets the scope for everything that follows — which years are examined, which entities are pulled in and whether a nexus questionnaire quietly becomes an assessment.
We take over the correspondence; manage the auditor relationship; prepare your documentation; and handle protests, appeals and penalty abatement if the assessment stands. If you have a notice in hand with a deadline on it, call our Detroit or Troy office directly.
Voluntary disclosure. Most states offer a program that allows an unregistered taxpayer to come forward anonymously, limit the lookback period — typically three to four years instead of an unlimited one — and have penalties waived in exchange for registering and paying the tax and interest.
The key constraint is timing: voluntary disclosure is generally off the table once a state has contacted you. If you suspect exposure, quantifying it and deciding whether to come forward is a conversation worth having now rather than after the notice arrives.
Our state and local tax consulting is generally a fit for middle-market organizations. We serve a range of organizations, from manufacturers, distributors and logistics companies from roughly $20 million in revenue upward to $1 billion; to service businesses of similar scale, including private equity portfolio companies, real estate and construction organizations, and investment funds. If you are unsure whether your situation warrants this kind of review, a conversation with us can help.