The MBT is imposed on the business income and modified gross receipts tax bases of taxpayers with business activity in Michigan, subject to statutory threshold amounts. Income reported to an individual on a 1099-MISC form will be considered business income and/or gross receipts under the definitions of those terms in MCL 208.1105 and 208.1111 and subject to MBT if the income is properly reported by the taxpayer (a) as business income on federal schedule C (Profit or Loss from Business - Sole Proprietorship) or on any similar federal schedule or form, or (b) as rental or royalty income reported on federal schedule E (Supplemental Income or Loss from rental real estate, royalties, etc.) or elsewhere on the federal return. Payments for services rendered as an employee/shareholder of the S corporation or for director fees would not be considered gross receipts or business income and would not be subject to MBT.