Plaintiff filed this action March 12, 1968, in the Court of Claims to recover its 1967 franchise fee* 1 paid under protest. The trial judge decided the controversy on the basis of the pleadings, stipulated facts, and briefs of the parties. After filing extensive findings of fact and conclusions of law, the trial judge granted plaintiff’s claim and judgment entered in its favor against the State in the amount of $85,966 and interest. This appeal followed.
In 1966, plaintiff, a foreign corporation, served or did business at locations in 33 states, the District of Columbia, and Canada. That year plaintiff was authorized to do business in it states, including Michigan. For the privilege of being authorized to do business in Michigan, plaintiff is required by the statute referred to in the footnote to pay a franchise fee. The amount of such fee is determined from the paid-up capital and surplus of plaintiff apportioned to Michigan. This apportionment is determined by the' formula specified in MCLA § 450.305 (Stat Ann 1970 Cum Supp § 21.208). The statutory fee requirement and method of determination were approved in Wisconsin <& Michigan Steamship Company v. Corporation & Securities Commission (1963), 371 Mich 61.
In its brief, plaintiff concedes, “a state * * * within reasonable limits may compute the amount *246of the charge [for doing an intrastate business] by applying the tax rate to a fair proportion of the taxpayer’s business done within the state, including both interstate and intrastate.” In support of this concession, plaintiff cites Wisconsin & Michigan Steamship Company, supra, among other cases.
One of plaintiff’s attacks on the computation of the 1967 franchise fee it paid under protest is that the fee exceeds “reasonable limits”. In support of this position, plaintiff argues and the trial court found that the fee exacted is 37% of the gross revenues produced from the privilege granted by the state, i.e., the right to do an intrastate business in Michigan. The flaw in this argument and the error in the trial court’s finding is that it fails to take into account plaintiff’s interstate business originating in Michigan, a factor plaintiff concedes to be appropriate. If the franchise fee exacted is divided by the total gross revenue of plaintiff derived from intrastate business and interstate business originating in Michigan, the fee exacted is .00264% of plaintiff’s gross revenue derived from intrastate business.
Plaintiff’s argument and the trial court’s finding that application of the statutory formula to plaintiff’s paid-up capital and surplus results in an apportionment to Michigan of plaintiff’s paid-up capital and surplus that is disproportionate to plaintiff’s business in Michigan are similarly fallacious. The argument and the finding consider only plaintiff’s intrastate activity and ignore plaintiff’s interstate activity originating in Michigan.
We hold that application of the State formula to plaintiff’s paid-up capital and surplus is within reasonable limits and that the tax rate was applied to a fair proportion of plaintiff’s business done within the state of Michigan.
*247Plaintiff’s second attack on the computation of its 1967 franchise fee relates to “reserve for deferred federal income taxes”. Plaintiff does not include this item in surplus. Defendant insists it shall be included in surplus. In National-Standard Company v. Department of Treasury (1970), 384 Mich 184, a majority of the Supreme Court has finally laid to rest this long-controverted issue. For the purpose of computing the Michigan franchise fee, “reserve for deferred federal income taxes” is included in surplus, except in the case of public utilities.
Reversed but without costs.
V. J. Brennan, J., concurred.MCLA § 450.304 (Stat Ann 1970 Cum Supp § 21.205).