Because the issue here presented can be best understood in its factual context, we begin with a statement of the essential facts from which the issue arises.
I. FACTS AND PROCEEDINGS
Caterpillar, Inc., is a Delaware-based corporation qualified under the laws of Michigan, with its principal place of business in Peoria, Illinois. It is a multinational company, which designs, manufactures, and markets earth-moving, construction, and materials-handling machinery and equipment, as well as engines for such products. Caterpillar conducts a portion of its business in Michigan, and pays taxes to the State of Michigan pursuant to the Single Business Tax Act (sbt), MCL 208.1 et seq.; MSA 7.558(1) et seq.
Caterpillar brought an action in the Court of Claims against the Department of Treasury, seeking a refund of all sbt taxes it paid in the years *4051981 through 1984.1 It challenges the constitutionality of the capital acquisition deduction (cad), MCL 208.23(a), (c); MSA 7.558(23)(a), (c) of the sbt,2 claiming that the cad burdens interstate commerce, and thereby violates the Commerce Clause of the United States Constitution3 by discriminating against non-Michigan-based companies and favoring Michigan-based companies.4
On July 13, 1989, the Court of Claims held that the cad was unconstitutional. The court stated *406that the cad discriminates against out-of-state corporations in a way that has been consistently ruled unconstitutional by the United States Supreme Court on the ground that it violates the Commerce Clause. The court cited the following cases in support of this contention: Halliburton Oil Well Cementing Co v Reily, 373 US 64; 83 S Ct 1201; 10 L Ed 2d 202 (1963), Nippert v Richmond, 327 US 416; 66 S Ct 586; 90 L Ed 760 (1946), American Trucking Ass’ns, Inc v Scheiner, 483 US 266; 107 S Ct 2829; 97 L Ed 2d 226 (1987), and Westinghouse Electric Corp v Tully, 466 US 388; 104 S Ct 1856; 80 L Ed 2d 388 (1984). The court further ruled that the discriminatory effect of the cad should be remedied by disallowing the application of the cad for any taxpayer, and thus the court acted to sever subsections 23(a) and (c) from the sbt.5 The court ruled, however, that its deci*407sion would apply only to taxable years beginning after September 30, 1989, thus granting prospective relief only.
Caterpillar appealed the Court of Claims decision to grant prospective relief only and to sever the cad in its entirety from the sbt. On February 5, 1991, the Court of Appeals entered its decision, 188 Mich App 621; 470 NW2d 80 (1991), noting first that it was not ruling on the issue whether the cad violates the Commerce Clause of the United States Constitution.6 In regard to the other issues, the Court affirmed the Court of Claims decision to grant prospective relief only, but modified its decision in regard to the specific relief granted. The Court of Appeals held that instead of severing the cad in its entirety, only that language that produces the discriminatory effect should be removed from the sbt.7
Caterpillar filed an application for leave to ap*408peal, and the Department of Treasury filed an application for leave to appeal as cross-appellant. On October 4, 1991, we granted both applications and limited the appeals to the following issues: (1) whether, before the passage of 1991 PA 77,8 the cad provisions violated US Const, art I, § 8, cl 3, if so, (2) whether the lower courts erred by limiting the effect of their rulings to tax years beginning after September 30, 1989, and (3) what relief, if any, plaintiff-appellant should receive. 439 Mich 860.
II. CAPITAL ACQUISITION DEDUCTION
To better understand the issues implicated in this case, we move next to a discussion of the cad. It is important to note that the cad is not an isolated tax statute, but is part of an overall tax scheme that represents a policy choice adopted by the state Legislature. This tax scheme is the sbt. The sbt, enacted by the Legislature in 1975,9 was "new and experimental legislation in this state.” Town & Country Dodge, Inc v Dep’t of Treasury, 420 Mich 226, 234; 362 NW2d 618 (1984).10 The sbt is a consumption-type value-added tax. See Mobil Oil v Dep’t of Treasury, 422 Mich 473, 496, and n 14; 373 NW2d 730 (1985). It is not, however, a pure value-added tax because it is subject to various exemptions, exclusions, and industry-specific ad*409justments.11 Under the sbt, the first step in determining a taxpayer’s tax liability is to determine its tax base. This tax base is defined as business income before apportionment subject to certain adjustments. MCL 208.9; MSA 7.558(9). The tax base is then apportioned between Michigan and other states in which the taxpayer conducts business activities. MCL 208.40, 208.41, 208.45; MSA 7.558(40), 7.558(41), 7.558(45). This is done by using a three-factor apportionment formula.12 After apportionment, the tax base is subject to several additional adjustments.13 One such adjustment is the cad.
The cad does just what its name suggests. It provides a deduction for the acquisition of capital assets. Following the general principles of consumption-type value-added tax treatment, the cad allows the taxpayer’s tax base to be reduced by the amount expended during the tax year to acquire capital assets. See Kasischke, Computation of the *410Michigan single business tax: Theory and mechanics, 22 Wayne L R 1069 (1976). This consumption-type element of the cad and sbt thereby provides a cash-flow advantage to the purchaser/user of capital assets. The cad allows the purchaser/user to increase its cash flow by reducing its tax liability through the deduction. Such a tax policy may help to encourage Michigan-related investments and may provide an economic stimulus to certain parts of the business sector due to the increase in cash flow.14
The deduction provided by the cad is not applied to the tax base until after the tax base has been allocated or apportioned. MCL 208.23; MSA 7.558(23). Since the tax base after apportionment represents only Michigan business activity, only capital acquisitions related to Michigan business activity should qualify for -treatment pursuant to the cad. The cad (subsections 23[a] and 23[c]) is designed to accomplish this result. Subsections 23(a) and 23(c) provide methods of apportioning a taxpayer’s capital acquisitions so that only those acquisitions that relate to Michigan business activity are included in the cad. Apportioning the cad for tangible personal property15 is accomplished in subsection 23(a). Apportioning the cad for real property16 is accomplished in subsection 23(c).17
Under subsection 23(a), the deduction for tangible personal property is available for any tax*411payer, whether a multistate company18 or a company whose business activity is allocated entirely to Michigan19 — an in-state company. Furthermore, subsection 23(a) does not limit the cad for tangible personal property to only those assets located in Michigan. Because tangible personal property is readily transportable, it is not that easy to determine where tangible personal property is actually located, or how or if such location should be or is solely determinative of its proper use in the cad. The Legislature recognized that it could not reach such a determination without imposing burdensome accounting problems upon the taxpayers and upon the Michigan taxing system itself. In response to these problems, the Legislature, following traditional taxing policy and practice of state legislatures, adopted an apportionment formula to calculate the cad for tangible personal property related to Michigan business activities. The apportionment formula adopted was a two-factor formula. To figure out the cad for tangible personal property, the total cost of the tangible personal property acquired during the tax year (regardless of whether it is purchased in Michigan) is multiplied by the average of the property factor and the payroll factor.20
The two-factor formula used in subsection 23(a) *412is obviously not the same as the three-factor formula used in computing a taxpayer’s tax base attributable to Michigan.21 The theory behind the use of the two-factor apportionment formula in subsection 23(a) is that the acquisition of the capital is most likely to be located where a company’s property and payroll (employees) are located. The sales factor used in the three-factor formula is excluded on the premise that while a taxpayer’s investment in productive capacity (capital assets) follows the taxpayer’s existing investment in property and labor, it does not necessarily follow the location of its sales.22
As with subsection 23(a), under subsection 23(c) the deduction for real property is available for any taxpayer, whether a multistate company or a company whose business activity is allocated entirely to Michigan — an in-state company. The method of apportionment, however, is much more simple. Location of real property is obvious and does not involve accounting problems. Moreover, investment in real property is considered to be directly related to productive capacity. Therefore, subsection 23(c) provides a one hundred percent deduction for the cost of real property "provided that the assets are physically located in Michigan.”
The lack of symmetry between the three-factor apportionment formula used for calculating the sbt tax base and the two-factor apportionment formula used under subsection 23(a) of the cad is ultimately the basis for Caterpillar’s constitutional challenge23 of the cad.24_
*413III. ANALYSIS
When considering the constitutional challenge presented by Caterpillar and reviewing the decisions of the lower courts in this case, we begin our analysis by recognizing that, in regard to such issues, we are guided by several well-established principles of law that frame our inquiry. Johnson v Harnischfeger Corp, 414 Mich 102, 112; 323 NW2d 912 (1982). Legislation that is challenged on constitutional grounds is_ "clothed in a presumption of constitutionality.” Cruz v Chevrolet Grey Iron Div of General Motors Corp, 398 Mich 117, 127; 247 NW2d 764 (1976). A statute is presumed constitutional absent a clear showing to the contrary. Lehnhausen v Lake Shore Auto Parts, 410 US 356; 93 S Ct 1001; 35 L Ed 2d 351 (1973). "[I]t is the duty of the Court to give the presumption of constitutionality to a statute and construe it as constitutional unless the contrary clearly appears.” People v McQuillan, 392 Mich 511, 536; 221 NW2d 569 (1974). The presumption of constitutionality is especially strong with respect to taxing statutes. Ludka v Dep’t of Treasury, 155 Mich App 250, 264; 399 NW2d 490 (1986), citing O’Reilly v Wayne Co, 116 Mich App 582, 591; 323 NW2d 493 (1982). State legislatures have great discretionary latitude in formulating taxes. Wisconsin v J C Penney Co, 311 US 435, 444-445; 61 S *414Ct 246; 85 L Ed 267 (1940).25 "The legislature must determine all questions of State necessity, discretion or policy in ordering a tax and in apportioning it. 1 Cooley, Taxation (4th ed), § 67. And the judicial tribunals of the State have no concern with the policy of State taxation determined by the legislature. 1 Cooley, Taxation (4th ed), § 67.” C F Smith Co v Fitzgerald, 270 Mich 659, 670; 259 NW 352 (1935) (cited for support in Stockler v Dep’t of Treasury, 75 Mich App 640, 644; 255 NW2d 718 [1977]). See also Bowerman v Sheehan, 242 Mich 95, 97-98; 219 NW 69 (1928). A taxpayer challenging a tax on constitutional grounds must overcome a strong presumption in favor of the *415taxing statute’s validity and point out with specificity the constitutional provision that is violated. Penn Mut Life Ins Co v Dep’t of Licensing & Regulation, 162 Mich App 123; 412 NW2d 668 (1987); Huron-Clinton Metropolitan Auth’y v Bd of Supervisors of Five Counties, 300 Mich 1, 12; 1 NW2d 430 (1942); Young v Ann Arbor, 267 Mich 241, 243; 255 NW 579 (1934). A taxing statute must be shown to " 'clearly and palpably violate[ ] the fundamental law’ ” before it will be declared unconstitutional. O’Reilly, supra at 592, citing Thoman v Lansing, 315 Mich 566, 576; 24 NW2d 213 (1946). With these essential principles in mind, we address the constitutional challenge presented in this case.
The United States Supreme Court, cognizant of these essential principles and equally mindful of and responsive to Commerce Clause dictates, has established a four-pronged test to determine whether a state tax violates the Commerce Clause. Complete Auto Transit, Inc v Brady, 430 US 274, 279; 97 S Ct 1076; 51 L Ed 2d 326 (1977). A state tax will withstand scrutiny under a Commerce Clause challenge and will be held to be constitutionally valid under the four-pronged test articulated in Complete Auto provided that the tax: (1) is applied to an activity having a substantial nexus with the taxing state, (2) is fairly apportioned, (3) does not discriminate against interstate commerce, and (4) is fairly related to the services provided by the state.26 We now apply this four-pronged test to the cad.
*416A. SUBSTANTIAL NEXUS
The first prong of the Complete Auto test requires us to determine whether the sbt through the cad provisions is applied to an activity having a substantial nexus with Michigan. "The requisite 'nexus’ is supplied if [Caterpillar] avails itself of the 'substantial privilege of carrying on business’ within the State . . . .” Mobil Oil Corp v Comm’r of Taxes of Vermont, 445 US 425, 437; 100 S Ct 1223; 63 L Ed 2d 510 (1980). See also Exxon Corp v Wisconsin Dep’t of Revenue, 447 US 207, 220; 100 S Ct 2109; 65 L Ed 2d 66 (1980). Furthermore, "[t]he fact that a tax is contingent upon events brought to pass without a state does not destroy the nexus between such a tax” and business activities with the state. J C Penney, supra at 445. "[Visible territorial boundaries do not always establish the limits of a state’s taxing power or jurisdiction. ... If there is some jurisdictional fact or event to serve as a conductor, the reach of the state’s taxing power may be carried to objects of taxation beyond its borders.” Miller Bros Co v Maryland, 347 US 340, 342-343; 74 S Ct 535; 98 L Ed 744 (1954). Thus, to allow a state to impose a tax on interstate activities, there must be some minimal connection between those activities and the taxing state. See Moorman Mfg Co v Bair, 437 US 267, 273; 98 S Ct 2340; 57 L Ed 2d 197 (1978); Container Corp v Franchise Tax Bd, 463 US 159, 165-166; 103 S Ct 2933; 77 L Ed 2d 545 (1983); Mobil Oil, supra, 445 US 436-437. To establish the requisite nexus under the constitution, it must simply be determined whether there exists "some definite link, some minimum connection, between [the state and the business activities] it seeks to tax.” Miller Bros, supra at 344-345. See also Nat’l Bellas Hess, Inc v Illinois Dep’t of Revenue, 386 *417US 753, 756; 87 S Ct 1389; 18 L Ed 2d 505 (1967); Nat’l Geographic Society v California Bd of Equalization, 430 US 551, 561; 97 S Ct 1386; 51 L Ed 2d 631 (1977). It is clear from the facts as set forth in this case that Caterpillar conducts a portion of its business in Michigan.27 Thus, we are persuaded that there exists some definite link, some minimum connection, between Michigan and Caterpillar’s business activities that it seeks to tax. Therefore, we find that the sbt through the cad provisions is applied to an activity having a substantial nexus with Michigan. Having concluded that a sufficient Michigan connection exists, the first prong of the Complete Auto test is plainly satisfied.
B. FAIR APPORTIONMENT
We turn next to the second prong of the Complete Auto test to determine whether the cad provisions of the sbt are fairly apportioned. Fair apportionment requires that each state- tax only its fair share of interstate business activity. Goldberg v Sweet, 488 US 252, 260-261; 109 S Ct 582; 102 L Ed 2d 607 (1989). The function of apportionment is to determine what portion of a multistate company’s business activity can be fairly attributed to the taxing state. Trinova v Dep’t of Treasury, 433 Mich 141, 157; 445 NW2d 428 (1989). See also Shell Oil Co v Iowa Dep’t of Revenue, 488 US 19; 109 S Ct 278; 102 L Ed 2d 186 (1988). This determination "is often an elusive goal, both in theory and in practice.” Container Corp, supra at *418164. However, while formula apportionment cannot guarantee a perfect result, "the constitution requires neither a perfect formula nor a perfect apportionment.” Trinova, supra, 433 Mich 162. Moreover, separate geographical accounting has been held to offer no better solution to computation of taxation of interstate activity. See Container Corp, supra at 181. Therefore, state legislatures have been allowed wide latitude in determining whether formula apportionment provides the best method available to their respective states in deciding how to tax the state’s fair share of interstate business activity. Moorman, supra at 272-273.
The United States Supreme Court has long upheld the constitutionality of formula apportionment. See, e.g., Moorman, supra; Butler Bros v McColgan, 315 US 501; 62 S Ct 701; 86 L Ed 991 (1942); Hans Rees’ Sons, Inc v North Carolina, 283 US 123; 51 S Ct 385; 78 L Ed 879 (1931); Bass, Ratcliff & Gretton, Ltd v State Tax Comm, 266 US 271; 45 S Ct 82; 69 L Ed 282 (1924); Underwood Typewriter Co v Chamberlain, 254 US 113; 41 S Ct 45; 65 L Ed 165 (1920). In upholding the constitutionality of formulary apportionment, "the United States Supreme Court has refused to require the use of one formula to the exclusion of all others.” Trinova, supra, 433 Mich 157. Furthermore, the Court has "declined to undertake the essentially legislative task of establishing a 'single constitutionally mandated method of taxation.’ ” Goldberg, supra at 261. See also Trinova v Michigan Dep’t of Treasury, 498 US 358, —; 111 S Ct 818, 836; 112 L Ed 2d 884 (1991). The only constitutional requirement for apportionment is that it be fair. Container Corp, supra.
A determination whether apportionment is fair in a given case has most recently required analyzing two components of fairness. The first compo*419nent of fairness focuses on the structure of the tax. This component requires that the tax structure be internally consistent. "To be internally consistent, a tax must be structured so that if every State were to impose an identical tax, no multiple taxation would result,” Goldberg, supra at 261, or, in other words, no more than one hundred percent of the taxpayer’s business activity would be taxed. Under subsection 23(a) of the cad, Caterpillar would receive a cad for one hundred percent of its acquired tangible personal property, divided among the states in which it has property and payroll.28 Similarly, under subsection 23(c) of the cad, Caterpillar would receive a cad for one hundred percent of its acquired real property. Under subsection 23(c), Caterpillar would receive a cad in each state for all of the real property it acquired in that state.29 We conclude, therefore, that the internal consistency component of fairness is satisfied.
The second component of fairness for apportionment focuses on the relationship between the factors used to determine apportionment and the activity that is being apportioned. This component requires that the apportionment be externally consistent. External consistency requires that the choice of factors used in apportionment "reasonably reflects the in-state component of the activity being [apportioned].” Goldberg, supra at 262. Subsection 23(a) of the cad uses a two-factored apportionment formula. The two factors used are the property factor and the payroll factor. The theory behind the decision to use these specific factors, as opposed to other factors, is that the acquisition of the capital is most likely to be located where a company’s property and payroll (employees) are *420located. The sales factor used in the three-factor formula is excluded on the premise that while a taxpayer’s investment in productive capacity (capital assets) follows the taxpayer’s existing investment in property and labor, it does not necessarily follow the location of its sales. See ante, pp 411-412. We are persuaded that the reasoning provided by this theory makes it clear that the choice of factors used in subsection 23(a) of the cad reasonably reflects capital acquisitions related to Michigan business activity.
In so concluding, we are not deciding that the two-factor apportionment formula best reflects the in-state component of capital acquisitions of tangible personal property, nor are we obliged to make such a determination. See Trinova, supra, 111 S Ct 834. We need only find that the two-factor apportionment formula reasonably reflects the in-state component of capital acquisitions of tangible personal property. To make this determination we are not required to find that the formula results in the precise or actual in-state component of capital acquisitions of tangible personal property. Formulas that have been found to provide only a rough approximation have been upheld. Moorman, supra at 272. See also Trinova, supra, 111 S Ct 833; Amerada Hess Corp v New Jersey Dep’t of Treasury, 490 US 66, 75; 109 S Ct 1617; 104 L Ed 2d 58 (1989). Indeed, apportionment formulas inherently overreflect or underreflect the in-state component of the interstate business activity being taxed. Despite this imprecision, the United States Supreme Court has consistently held that such formulas reasonably reflect the in-state component of the interstate business activity being taxed. See Moorman, supra at 272-273.
Therefore, because we have found that the two-factor apportionment formula reasonably reflects *421the Michigan component of the capital acquisitions of tangible personal property made by Caterpillar, we need not determine whether the use of a three-factor apportionment formula would produce a more fair or precise result. Such a determination is better and more appropriately left to the Michigan Legislature.30 See Trinova, supra, 111 S Ct 818; Moorman, supra.
Under subsection 23(c), the sole factor considered in apportioning the cad is the physical location of the real property acquired. As stated previously in this opinion, ante, p 412, this was done because the location of real property is obvious, and because investment in real property is directly related to productive capacity. We find, on the basis of this reasoning, that the choice of factors used in subsection 23(c) of the cad reasonably reflects capital acquisitions related to Michigan business activity. Thus, the external consistency component of fairness is satisfied.
In Trinova, supra, 433 Mich 160, this Court stated:
[T]he test for fair apportionment is not whether a formula results in inadequate or even inaccurate apportionment. The test is whether the use of a particular method of apportionment results in business activity being attributed to this state which is "out of all appropriate proportions” to the taxpayer’s intrastate business activity, or has "led to a grossly distorted result.”
The burden of showing that a tax is not fairly apportioned is on the taxpayer. See Trinova, supra, 433 Mich 158. See also Trinova, 111 S Ct 832, Container Corp, and Moorman, supra. No facts presented in this case evidence any substantial *422misappropriation or any such distorted result. Therefore, we find that the methods of apportionment under the cad, satisfying the requirements of both internal consistency and external consistency, meet the test for fair apportionment. Thus, we conclude that the second prong of the Complete Auto test is satisfied.
C. DISCRIMINATION
We turn next to the third prong of the Complete Auto test to determine whether the cad provisions of the sbt discriminate against interstate commerce. Interstate commerce is not immune from state taxation and may constitutionally be made to pay its way. See Complete Auto, supra. However, "the Commerce Clause prohibits economic protectionism — that is, regulatory measures designed to benefit in-state economic interests by [unduly] burdening out-of-state competitors.” New Energy Co of Indiana v Limbach, 486 US 269, 273-274; 108 S Ct 1803; 100 L Ed 2d 302 (1988). See also Boston Stock Exchange v State Tax Comm, 429 US 318, 329; 97 S Ct 599; 50 L Ed 2d 514 (1977). A tax violates the third prong of the Complete Auto test if it is facially discriminatory, has a discriminatory purpose, or has the effect of unduly burdening interstate commerce. See Amerada Hess, supra at 75.
1. FACIAL DISCRIMINATION
The cad is available for any taxpayer, whether a multistate company or a company whose business activity is allocated entirely to Michigan — an instate company. This is true under both subsections 23(a) and 23(c). Therefore, Caterpillar cannot point to any treatment of in-state and out-of-state com*423panies that is discriminatory on its face. See Trinova, supra, 111 S Ct 835.31
2. DISCRIMINATORY PURPOSE
Caterpillar claims that the cad provided in subsection 23(a) is discriminatory because the two-factor apportionment formula excludes consideration of the sales factor used in the three-factor apportionment formula used to calculate the taxpayer’s apportioned tax base under the sbt. When the reasons for using the two-factor formula and the three-factor formula in the various parts of the sbt are reviewed, it is clear that a finding of a discriminatory purpose for enacting subsection 23(a) is not required. The three factors used in apportioning the tax base under the sbt — payroll factor, property factor, and sales factor — " 'appear in combination to reflect a very large share of the activities by which value is generated.’ ” Trinova, supra, 111 S Ct 833 (emphasis in original). Likewise, the two factors used in apportioning the capital acquisitions of tangible personal property under subsection 23(a) — payroll factor, property factor — appear to reasonably reflect the in-state component of capital acquisitions of tangible personal property. See part iii(b) of our opinion, ante, pp 417-422. Formulas used in apportioning a value-added tax base and a deduction provided for acquisitions of capital are not constitutionally required to be identical. There is no constitutional requirement that different provisions of a taxing statute be in any way symmetrical. Therefore, we cannot conclude that the use of two different *424apportionment formulas in the sbt evidences any discriminatory purpose.
Caterpillar also urges that subsection 23(c) is discriminatory because it was enacted to promote investment in Michigan. In Trinova, supra, 111 S Ct 835, the United States Supreme Court held that the promotion of development and investment of business in Michigan does not violate the Commerce Clause.
It is a laudatory goal in the design of a tax system to promote investment that will provide jobs and prosperity to the citizens of the taxing state.- States are free to "structure] their tax systems to encourage the growth and development of intrastate commerce and industry.” Boston Stock Exchange, supra, 429 US 336-337.
Therefore, we do not find discriminatory purpose in the enactment of subsection 23(c).
We conclude, as did the Trinova Court, that "all the contemporaneous evidence concerning passage of the sbt suggests a benign motivation, combined with a practical need to increase revenues.” Trinova, supra, 111 S Ct 835. Furthermore, we do not find "any evidence that the sbt was inspired as a way to export tax burdens or import tax revenues.” Id., 111 S Ct 836. Thus, we conclude and more specifically find no discriminatory purpose in the enactment of the cad.
3. DISCRIMINATORY EFFECT
Even if a tax statute is not discriminatory on its face and was not enacted with the intent to discriminate against interstate commerce, it can still be held to violate the Commerce Clause if it is found to have a discriminatory effect on interstate commerce. Caterpillar claims that subsection 23(a) *425has the discriminatory effect of favoring Michigan-based companies at the expense of non-Michigan-based companies. Caterpillar claims this discrimination is directly related to the unfair design of the two-factor apportionment formula. In support of its claim, Caterpillar argues that the two-factor apportionment formula discriminates against certain multistate companies like itself who do not have a predominant part of their facilities and employees in Michigan in comparison to their sales, and who therefore receive a smaller cad than if the sales factor was included in the apportionment formula.
The United States Supreme Court has held that when the different effects of a tax provision on different companies result solely from the differences between the nature of these companies’ businesses and not from the location of their activities (i.e., in state or out of state), there exists no discriminatory effect on interstate commerce. See Amerada Hess, supra at 78. See also White v Reynolds Metals Co, 558 So 2d 373, 389-390 (Ala, 1989). Similarly, a discriminatory effect does not result from fair encouragement of in-state business like that provided by subsection 23(c). See Armco, Inc v Hardesty, 467 US 638, 645-646; 104 S Ct 2620; 81 L Ed 2d 540 (1984), and Boston Stock Exchange, supra at 336-337. *426We agree with this analysis. Thus, we are persuaded that no discriminatory effect on interstate commerce was imposed on Caterpillar by virtue of the cad.
*425The [sbt] does not contain provisions aimed at imposing adverse tax consequences upon multistate taxpayers as a class. Generally speaking, the overall tax consequences to a multistate taxpayer will be dependent upon the nature of its business activities and whether it is eligible and. elects to avail itself of the tax reduction incentives afforded by the [sbt], [Pollock, Multistate taxpayers under the Single Business Tax Act, 22 Wayne L R 1101, 1113 (1976).]
*426The Court of Claims ruled that the cad has a discriminatory effect on interstate commerce. The court stated that the discriminatory effect of the cad has been consistently held to be unconstitutional by the United States Supreme Court as violative of the Commerce Clause. We observe, however, that the Court of Claims arrived at its decision without a full and thorough analysis of all four prongs of the Complete Auto test. The court, therefore, rendered its decision without any reference to whether the cad was fairly apportioned. Furthermore, we observe that the decision of the Court of Claims was announced before the decision of the United States Supreme Court in Trinova and therefore did not have the benefit of the Trinova analysis.
The Trinova Court fouñd that the sbt32 did not discriminate against interstate commerce in violation of the Commerce Clause, distinguishing the sbt from other taxing statutes that it has held to be unconstitutional. The Court stated that under the Michigan tax, there is no treatment of in-state and out-of-state companies that is discriminatory on its face, noting that such facial discrimination was found, however, in Westinghouse Electric Corp v Tully, Boston Stock Exchange, and Halliburton Oil Well Cementing Co v Reily, supra. Trinova, supra, 111 S Ct 835. Moreover, the Court in Trinova stated that while it recognizes that the "Commerce Clause requires more than mere facial neutrality,” id., and that " 'the Commerce Clause has a deeper meaning that may be implicated even though state provisions ... do not allocate tax *427burdens between insiders and outsiders in a manner that is facially discriminatory,’ ” id., citing American Trucking Ass’ns v Scheiner, supra at 281, "[t]he content of that requirement is fair apportionment” and "[t]he 'deeper meaning’ to which American Trucking refers is embodied in the requirement of fair apportionment, as expressed in the tests of internal and external consistency.” 111 S Ct 835. See also Container Corp, supra at 171 ("in the interstate commerce context . . . the antidiscrimination principle has not in practice required much in addition to the requirement of fair apportionment”).
Having found that the cad was fairly apportioned and having reviewed, the United States Supreme Court’s own interpretation of its prior decisions in Westinghouse, Boston Stock Exchange, Halliburton, and American Trucking, we find our decision, holding that there is no discriminatory effect on interstate commerce imposed on Caterpillar by virtue of the cad, to be consistent with prior case law on this issue and warranted in this case.
In sum, the cad is not facially discriminatory, nor does the cad have a discriminatory purpose or effect. Therefore, the third prong of the Complete Auto test is satisfied.
D. FAIR RELATION TO SERVICES PROVIDED
The fourth prong of the Complete Auto test raises the issue whether the sbt through the cad provisions is fairly related to the services provided by Michigan. In Goldberg, supra at 266-267, the United States Supreme Court provided an explanation of what the fourth prong requires. The Court stated:
The purpose of this test is to ensure that a *428State’s tax burden is not placed upon [companies] who do not benefit from services provided by the State. Commonwealth Edison [Co v Montana, 453 US 609, 627; 101 S Ct 2946; 69 L Ed 2d 884 (1981)].
. . . The tax which may be imposed on a particular interstate transaction need not be limited to the cost of the services incurred by the State on account of that particular activity. Id. at 627, n 16. On the contrary, "interstate commerce may be required to contribute to the cost of providing all governmental services, including those services from which it- arguably receives no direct 'benefit.’ ” Ibid, (emphasis in original). The fourth prong of the Complete Auto test thus focuses on the wide range of benefits provided to the taxpayer, not just the precise activity connected to the interstate activity at issue. Indeed, last Term, in DH Holmes [Co, Ltd v McNamara, 486 US 24, 32; 108 S Ct 1619; 100 L Ed 2d 21 (1988)], we noted that a taxpayer’s receipt of police and fire protection, the use of public roads and mass transit, and the other advantages of civilized society satisfied the requirement that the tax be fairly related to benefits provided by the State to the taxpayer.
Caterpillar’s business activities in Michigan during the years 1981 through 1984 consisted of the following: the employment of from two to five sales representatives who were residents of Michigan, the ownership interest in patterns and tooling used by unrelated third-party Michigan suppliers in the manufacture and production of parts purchased by Caterpillar, the leasing of a forklift truck, and the sales of products shipped into Michigan. In light of Caterpillar’s business activity in Michigan, we find that Caterpillar has received the benefits of a "civilized society” that Michigan provides, as characterized by the Court in Goldberg, supra. Therefore, we find that the sbt through the *429cad provisions is fairly related to the services provided by Michigan. Thus, the fourth prong of the Complete Auto test is satisfied.
IV. CONCLUSION
In summary, we find that the capital acquisition deduction, MCL 208.23(a), (c); MSA 7.558(23)(a), (c) of the Single Business Tax Act, as it was in effect in relation to the challenge before us,33 satisfies all four prongs of the Complete Auto test. Therefore, we hold that the cad does not violate the Commerce Clause, US Const, art I, § 8, cl 3.34 Thus, we reverse the decisions of the Court of Claims and the Court of Appeals. We need not address the remaining issues because our decision on the Commerce Clause issue is dispositive.
Boyle, Griffin, and Mallett, JJ., concurred with Riley, J.A complaint with respect to the year 1981 was filed in the Court of Claims on December 10, 1984. A complaint with respect to the years 1982 through 1984 was filed in the Court of Claims on March 12, 1987. These cases were subsequently consolidated on May 28, 1987.
Caterpillar also challenged the constitutionality of the sbt’s three-factor formula for apportionment of a company’s tax base pursuant to SBT §§ 41 and 45. Caterpillar claimed that it was entitled to a refund of taxes pursuant to SBT § 69 because the application of the three-factor apportionment formula did not fairly represent Caterpillar’s business activities in Michigan and, thus, violated the Due Process and Equal Protection Clauses of the United States Constitution. Before a decision by the Court of Claims, Chief Circuit Judge Michael G. Harrison issued an administrative order holding in abeyance all cases involving such claims pending action by the Supreme Court in Trinova Corp v Dep’t of Treasury. We eventually upheld the constitutionality of the sbt and its three-factor apportionment formula in Trinova Corp v Dep’t of Treasury, 433 Mich 141; 445 NW2d 428 (1989), and the United States Supreme Court affirmed, Trinova Corp v Michigan Dep’t of Treasury, 498 US 358; 111 S Ct 818; 112 L Ed 2d 884 (1991).
On November 10, 1988, a joint motion was filed by the parties requesting that the Court of Claims decide separately Caterpillar’s remaining claim that the cad was unconstitutional. On November 16, 1988, the Court of Claims granted the motion.
The Congress shall have Power ... To regulate Commerce with foreign Nations, and among the several States, and with the Indian Tribes .... [US Const, art I, § 8, cl 3.]
Caterpillar’s term "Michigan-based” company means a multistate company with the predominant part of its facilities and employees in Michigan in comparison to its sales. The term "non-Michigan based” company refers to a multistate company with large out-of-state operations (companies whose facilities and employees in Michigan are less predominant in comparison to its sales in the state). Neither term describes a Michigan company that operates exclusively within the state — an intrastate company.
The statutory language of the cad is stated as follows:
After allocation as provided in section 40 or apportionment as provided in section 41, the tax base shall be adjusted by the following:
(a) Deduct the cost, including fabrication and installation, paid or accrued in the taxable year of tangible assets of a type which are, or under the internal revenue code will become, eligible for depreciation, amortization, or accelerated capital cost recovery for federal income tax purposes excluding costs of assets which are defined in section 1250 of the internal revenue code, except that for tangible assets which are subject to a lease back agreement under section 168(f)(8) of the internal revenue code, the deduction shall be allowed only to the lessee or sublessee as the case may be under the 168(f)(8) agreement. This deduction shall be multiplied by a fraction, the numerator of which is the payroll factor plus the property factor and the denominator of which is 2.
(c) Deduct the cost, including fabrication and installation, excluding the cost deducted under subdivision (a) paid or accrued in the taxable year of tangible assets of a type which are, or under the internal revenue code will become eligible for depreciation, amortization, or accelerated capital cost recovery for federal income tax purposes, provided that the assets are physically located in Michigan. [MCL 208.23; MSA 7.558(23). Emphasis added.]
The Court stated that because the defendant did not cross appeal the Court of Claims ruling in regard to the cad’s constitutionality, that issue was not before the Court. Without decrying this decision by the Court of Appeals, we find that the issue of constitutionality of the cad is justly before us. Although defendant did not cross appeal the finding of unconstitutionality, a review of the record in this case reveals that defendant’s brief in the Court of Appeals did include the argument that the cad was constitutional; thus, it is worth noting that defendant did make a positive effort to argue constitutionality in the Court of Appeals. More importantly, however, we find that it is within this Court’s jurisdiction to review this issue sua sponte. "The Supreme Court may, at any time, in addition to its general powers . . . enter any judgment or order that ought to have been entered, and enter other and further orders and grant relief as the case may require . . . .” MCR 7.316(A)(7). See also MCR 7.302(F)(4)(a), which states that an appeal "shall be limited to the issues raised in the application for leave to appeal,” unless otherwise ordered by the Court. Review and analysis of a decision by a level of the judiciary finding an enactment of the legislative branch to be in violation of constitutional prescriptions (especially in the area of state tax policy) is justified in order to ensure that the proper balance remains between the two branches of government. Careful review of constitutional issues by this Court cannot be logically or legitimately viewed as overreaching.
See the emphasized portions of the statutory language of the cad in n 5.
The cad provisions of the sbt were amended upon passage of 1991 PA 77. The act was ordered to take immediate effect. Caterpillar’s claims, however, concern only the years 1981 through 1984. Therefore, for the purposes of this case, our discussion and analysis of the cad are limited to the statutory language of the cad in effect 1981 through 1984. See n 5 supra.
The sbt became effective January 1, 1976.
Since its enactment, there have been several challenges to the sbt on constitutional and other grounds. In each case, the validity of the sbt was upheld. See Stockler v Dep’t of Treasury, 75 Mich App 640; 255 NW2d 718 (1977); Town & Country Dodge, supra; Trinova, n 2 supra, 433 Mich 141; Trinova, n 2 supra, 111 S Ct 818.
See Trinova, n 2 supra, 111 S Ct 823-826; Trinova, n 2 supra, 433 Mich 149-153; and Kasischke, Computation of the Michigan single business tax: Theory and mechanics, 22 Wayne L R 1069 (1976), for further explanation and review of the sbt.
[I]f a taxpayer does business both within and without Michigan, it must determine the portion of its total value added attributable to Michigan. That portion ... is the average of three ratios: (1) Michigan payroll to total payroll, (2) Michigan property to total property, and (3) Michigan sales to total sales. Mich Comp Laws §§ 208.45, 208.46, 208.49, 208.51 (1979). The total tax base is multiplied by the portion of business activity attributable to Michigan (under the three-factor formula), and the result, subject to several further adjustments, is the taxpayer’s “adjusted tax base.” § 208.31(2). [Trinova, n 2 supra, 111 S Ct 826.]
For example, MCL 208.23, 208.31(2), 208.31(5), 208.35, 208.38, 208.39; MSA 7.558(23), 7.558(31)(2), 7.558(31)(5), 7.558(35), 7.558(38), 7.558(39). See Kasischke, Computation of the Michigan single business tax, n 11 supra at 1082-1094. Under the current language of the sbt, subsection 31(5) is listed as subsection 31(4). However, to be consistent with our reference to this subsection in relation to the Kasischke article, we cite the subsection as it was listed at the relevant time.
Whether such encouragement or stimulus occurs may depend on numerous other factors that affect business decisions and choices. A description and analysis of such factors are not, however, necessary for the resolution of the issue before us. We mention this only to draw attention to the fact that we can never analyze business behavior in relation to tax schemes in a theoretical vacuum.
Tangible personal property means tangible personal property as defined by the sbt and cad.
Real property means real property as defined by the sbt and cad.
See n 5.
See MCL 208.41; MSA 7.558(41).
See MCL 208.40; MSA 7.558(40).
0 x = property factor. = taxpayer's Michigan property taxpayer’s total property
y = payroll factor = taxpayer’s Michigan payroll taxpayer’s total payroll
TPP = total acquisition of tangible personal property during the tax year
CAD = TPP X (x + Y) / 2
Obviously, for a person subject to tax only in Michigan (an in-state company), a full deduction will result.
Compare ns 12 and 20.
See Kasischke, Computation of the Michigan single business tax, supra at 1084.
Ironically, Caterpillar originally also challenged the fairness of the three-factor apportionment formula (see n 2).
Caterpillar has made some brief argument in regard to its dis*413favor of subsection 23(c), but has clearly emphasized subsection 23(a) in its challenge to the cad in this case. Similarly, the lower court analysis of the cad’s constitutionality focuses entirely on subsection 23(a). Caterpillar, Inc v Dep’t of Treasury, unpublished opinion of the Court of Claims, decided July 13, 1989 (Docket Nos. 84-9664-CM and 87-11109-CM). The only times that the Court of Claims made any explicit reference to subsection 23(c) are in its order of final judgment entered August 11, 1989, and in its clarification of final judgment entered August 24, 1989.
The Constitution is not a formulary. It does not demand of states strict observance of rigid categories nor precision of technical phrasing in their exercise of the most basic power of government, that of taxation. For constitutional purposes the decisive issue turns on the operating incidence of a challenged tax. A state is free to pursue its own fiscal policies, unembarrassed by the Constitution, if by the practical operation of a tax the state has exerted its power in relation to opportunities which it has given, to protection which it has afforded, to benefits which it has conferred by the fact of being an orderly, civilized society.
This analysis is merely a reformulation of the classic approach of this Court to the taxing power of the states. Lawrence v State Tax Commission [286 US 276, 280; 52 S Ct 556; 76 L Ed 1102 (1932)]. Ambiguous intimations of general phrases in opinions torn from the significance of concrete circumstances, or even occasional deviations over a long course of years, not unnatural in view of the confusing complexities of tax problems, do not alter the limited nature of the function of this Court when state taxes come before it. At best, the responsibility for devising just and productive sources of revenue challenges the wit of legislators. Nothing can be less helpful than for courts to go beyond the extremely limited restrictions that the Constitution places upon the states and to inject themselves in a merely negative way into the delicate processes of fiscal policy-making. We must be on guard against imprisoning the taxing power of the states within formulas that are not compelled by the Constitution but merely represent judicial generalizations exceeding the concrete circumstances which they profess to summarize.
Since the Complete Auto decision, the four-pronged test has been applied on numerous occasions. See, e.g., Trinova, n 2 supra, 111 S Ct 818; Goldberg v Sweet, 488 US 252; 109 S Ct 582; 102 L Ed 2d 607 (1989); Amerada Hess Corp v New Jersey Dep’t of the Treasury, 490 US 66; 109 S Ct 1617; 104 L Ed 2d 58 (1989); American Trucking Ass’ns, Inc v Scheiner, supra; Maryland v Louisiana, 451 US 725; 101 S Ct 2114; 68 L Ed 2d 576 (1981).
Caterpillar’s business activities in Michigan during the years 1981 through 1984 consisted of the following: the employment of from two to five sales representatives who were residents of Michigan, the ownership interest in patterns and tooling iised by unrelated third-party Michigan suppliers in the manufacture and production of parts purchased by Caterpillar, the leasing of a forklift truck, and the sales of products shipped into Michigan.
See discussion of subsection 23(a), ante, pp 410-412.
See discussion of subsection 23(c), ante, p 412.
See n 25.
Although the Court’s analysis in Trinova was based on review of the sbt as a whole and not on the cad provisions specifically, the Court expressly stated that the cad provisions were relevant to the Court’s analysis and review of the sbt’s constitutionality. See Trinova, supra, 111 S Ct 826 and 835-836.
See n 31.
See n 8.
Furthermore, it can be concluded that the cad does not violate the Due Process Clause of the Fourteenth Amendment. "For a State to tax . . . interstate commerce, the Due Process Clause of the Fourteenth Amendment imposes two requirements: a 'minimal connection’ between the interstate activities and the taxing State, and a rational relationship between the income attributed to the State and the intrastate values of the enterprise.” Mobil Oil, supra, 445 US 436-437. The first and second prongs of the Complete Auto test encompass these requirements of the Due Process Clause. Therefore, because the cad satisfies all four prongs of the Complete Auto test, it necessarily satisfies the requirements of due process. See Amerada Hess, supra.