Business Income Tax

FAQ for Corporations, Partnerships and Trusts/Estates taxes

What type of entities have to file a return and pay city of Detroit income taxes?

All corporations, partnerships, and trusts and estates must file an annual income tax return. The partnership may pay tax for partners only if it pays for all partners subject to the tax. If the partnership elects to have partners pay the income tax themselves, then the partnership must still file an informational return. The partners must each file an individual return.

What is the city of Detroit tax rate for Corporations, Partnerships and Trusts and Estates?

2.00% for businesses
For Partnerships: The tax rate is 2.40% for resident partners, 1.20% for nonresident partners, and 2.00% for partners who are corporations.
1.2% for Estates and Trusts

What forms do city of Detroit Corporations, Partnerships and Estates and Trusts have to file?

If you are a:	Trying to:	Complete this form:	Owe Taxes or are expecting a Refund? Mail your completed form(s) to:	Other Instructions
Business in the City	File a 2015 Return	D-1120 Form 15 D-1120 or D-1120 (EXT) 15 D-1120 (Ext) if filing late	City of Detroit P.O. Box 33405 Detroit, MI 48232	D-1120 Instructions Form D-1120 Instructions Form D-1120 Instructions
Business in a City Renaissance Zone	File a 2015 Return	D-1120 Renaissance Zone (RZ) D-1120 (RZ)	City of Detroit P.O. Box 33405 Detroit, MI 48232
Partnership in the City	File a 2015 Return	D-1065 - Partnership in the City D-1065 or D-1065 - Partnership in the City - Extension D-1065 (Ext) if filing late	City of Detroit P.O. Box 33406 Detroit, MI 48232	D-1065 - Partnership in the City - Instructions Form D-1065 Instructions
Partnership in a City Renaissance Zone	File a 2015 Return	D-1065 (RZ) - Partnership in a City Renaissance Zone D-1065 (RZ)	City of Detroit P.O. Box 33406 Detroit, MI 48232
Business or Partnership in or out of the City of Detroit	Register for Withholding in 2016	DSS4 - Business or Partnership: Register for Withholding DSS4	City of Detroit 2 Woodward Avenue Income Tax-Suite 130 Detroit, MI 48226	DSS4 Instructions
Business or Partnership in or out of the City of Detroit	File Annual or Monthly Withholdings Report in 2016	D-941/501 DW4 - Business or Partnership: File Withholdings Report D-941/501 DW4	City of Detroit 2 Woodward Avenue Suite 130 Detroit, MI 48226
Business or Partnership in or out of the City of Detroit	Pay Monthly or Quarterly Estimate Payments in 2016	D-1040 (ES) - Make Business or Partnership Payments D-1040 (ES) D-1040 (ES) Quarterly - Make Business or Partnership Quarterly Payments D-1040 (ES) Quarterly
Business	Requesting Income Tax Clearance in 2016	Clearance Request Form	City of Detroit Income Tax Division 2 Woodward Avenue Suite 106 Detroit, MI 48226

Are you looking for a different form? Check Here!

If you are trying to file INDIVIDUAL INCOME TAXES click here or call our Taxpayer Assistance hotline: (313) 224-3315

Who has to withhold city of Detroit Income Tax?

Every employer is required to withhold that has a location in the City, or is doing business in the City (even if their location is outside the City). “Employers” are not just businesses, they can be an individual, partnership, association, corporation, non-profit organization, governmental body. Any agency that employs one or more persons on a salary, bonus, wage, commission or other basis must file withholdings.

How much does the employer withhold?

If you have employees who are not independent contractors (i.e.-W-2 staff as opposed to 1099 short-term employees) the withholding tax rate is as follows:

1.2% non-resident
2.4% resident

What is the process for filing and paying withholdings?

The first step is for filing and paying withholdings is registration. The form for Withholding Registration is

here
Payments should be mailed to:

Income Tax-Withholdings

Income Tax-Withholdings

Dept 131901 Income Tax-Withholdings
Treasurer City of Detroit
PO Box 67000
Detroit, MI 48267-1319

W-2 and DW-3 Annual reports should be filed at the end of each Tax Year (Employers are requested to file their W-2 and DW-3 documents electronically by sending a CD with scanned documents.) Instructions for the DW-3 reports can be found

here

More detailed instructions for the City of Detroit withholding process can be found

here
If you have further questions, you can call the City of Detroit Income Tax Withholdings Department at (313) 224-9596

What resources are available to help businesses through the process of filing their city forms and returns?

If you have Corporation, Partnership or Trust and Estate questions, call: (313) 224-9596
To pick up a Business Tax Packet with all the tax information, instructions and forms you'll need for the year, visit:

City of Detroit-Coleman A Young Municipal Building
2 Woodward Avenue, Suite 130
Detroit, MI 48226

What happens if a Business, Partnership, or other entity does not file or pay their taxes?

It is a crime and will cost you extra money.

Not filing and/or not paying your taxes is a Misdemeanor offense. The penalties for noncompliance are:
- Fine of up to $500
- Imprisonment not to exceed 90 days; or
- Both a fine and imprisonment
Interest and Penalties are added onto taxes already due
- The Michigan Department of Treasury sets the interest rate. This number is subject to change every six (6) months. See more details here
- The penalty for non-payment is 1% per month capped at a maximum of 25% of the unpaid tax.
- The penalty for underpayment of tax (delinquency) or claiming excessive refund is as follows:
  - $10 or 10%, whichever is greater, of the delinquency if the underpayment or excessive claim is due to negligence
  - $25 or 25%, whichever is greater, of the delinquency if the underpayment or excessive claim is due to intentional disregard
  - 100% of the delinquency if the underpayment or excessive claim is due tofraudulent intent to evade
- If the entity pays at least 70% of the estimated taxes owed, or at least 70% of prior year tax liability, there is no interest or penalty.

My business received a “Notice of Proposed Assessment” letter, what does this mean?

A "Notice of Proposed Assessment" letter means:

The entity owes income tax to the City of Detroit because it did not file a return and we have determined it had taxable income; or
We determined it owes additional taxes even though a return was filed

What should an entity do if it receives a letter that it will be audited?

We have prepared a detailed pamphlet regarding the audit process and outlining rights and obligations. Click [here]to download this pamphlet.
The entity should have received a letter in the mail notifying it of the audit. At the bottom of the letter is the contact information of a specific auditor. Call them as soon as possible. The contact number included is a direct line to the auditor.
Once the audit is complete, the auditor may issue a "Notice of Proposed Assessment" letter.
If you are requesting or filing information on an entity's behalf, please use the income tax Power of Attorney Form here.

Can an entity protest a "Notice of Proposed Assessment"?

Yes.

If an entity disputes a Notice of Proposed Assessment, it has 30 days after receipt of the letter to file a written protest with the Income Tax Administrator by emailing [email protected] or sending a letter to:

City of Detroit Income Tax Administrator
Coleman A. Young Municipal Center
2 Woodward Avenue
Detroit, MI 48226

The Income Tax Administrator will then give the taxpayer or entity or their duly authorized representative an opportunity to be heard and present evidence and arguments to support their position
The Income Tax Administrator will then issue a Final Assessment

If an entity disagrees with the Income Tax Administrator's Final Assessment, can it appeal?

Yes. If the entity disagrees with the Income Tax Administrator's ruling, the entity must:

File a written notice of appeal to the Secretary of the Income Tax Board of Review within thirty (30) days of receipt of the Final Assessment letter by sending a letter to:

City of Detroit Income Tax Board of Review
Coleman A. Young Municipal Center
2 Woodward Avenue
Detroit, MI 48226

The Income Tax Board of Review will grant the entity an appeal hearing. The appellant is entitled to present evidence that relates to your appeal and can have an authorized representative speak on its behalf. There are three (3) members on the Board, and they determine if a Final Assessment is maintained, modified, or reversed.
The three members of the Income Tax Board of Review are:
- G. Eric Winston
- Michael Wheeler
- Keisha L. Glenn, Esq.

If the entity disputes a decision by the City of Detroit's Income Tax Board of Review, it may appeal to the Michigan Tax Tribunal within thirty-five (35) days from the date of the Board's determination. See more information here.

If the entity is still not satisfied with the Michigan Tax Tribunal's decision then it can bring action in the Michigan Court of Appeals.

FAQ for Corporations, Partnerships and Trusts/Estates taxes

Documents

DSS4 Instructions - Business or Partnership: Instructions to Register for Withholding

D-1065 - Partnership in the City - Instructions

D-1120 Instructions

Forms

D-1120 Form 15

D-1120 (EXT) 15

D-1120 Renaissance Zone (RZ)

D-1065 - Partnership in the City

D-1065 - Partnership in the City - Extension

D-1065 (RZ) - Partnership in a City Renaissance Zone

Business Income Tax

Related Links

Documents

Forms