In Stratton-Cheeseman Management Co v. Dep't of Treasury, 159 Mich. App. 719, 721; 407 N.W.2d 398 (1987), the plaintiff corporation managed the Michigan Physicians Mutual Liability Company pursuant to a written agreement, which required Stratton-Cheeseman to issue policies, collect premiums, administer claims, and do a variety of other tasks. In return for discharging these responsibilities, the plaintiff corporation received a flat fee calculated in relation to the number of policyholders. Id. at 722. Under the terms of this agreement, the plaintiff corporation would also pay for certain expenses on behalf of the insurance company, which the insurance company would repay to the plaintiff corporation. Id. The plaintiff corporation claimed that it was liable for SBT only with regard to the flat fee it received and not this second type of income that came from reimbursements for its cost of doing business. Id. Asked to determine whether the reimbursement arrangement fit within the agency exclusion in MCL 208.7(3); MSA 7.558(7)(3), the Court stated: We are of the opinion that when plaintiff received and deposited into bank accounts designated by the insurance company premiums and other monies it was acting as an agent; these funds were intended by the Legislature to be excluded from the meaning of gross receipts in 7(3) of the SBTA. However, the payments received by plaintiff as reimbursement for costs incurred in managing the insurance company's business clearly were not. Plaintiff did not receive this money from the insurance company as a representative of the insurance company. Instead, the substance of the reimbursement payments for tax purposes was to compensate plaintiff for services provided in managing the insurance company's business. The fact that the insurance company reserved the right to approve costs prior to making payments and required plaintiff to operate within an approved budget does not alter this conclusion. In this regard, the insurance company's right to approve the amount of reasonable costs subject to reimbursement must be distinguished from plaintiff's right to authorize the actual expenditures. Plaintiff's contention that the insurance company "retained control" over costs fails to make this distinction. As the department correctly contends, to accept plaintiff's theory would result in only the monthly fees received by plaintiff, which are computed based on a fixed rate per policyholder, being subject to the tax. Since the monthly fees essentially represent gross profits above and beyond plaintiff's costs, the purpose of the SBTA to impose a tax on the value of business activity, and not its income, would be defeated. Stratton-Cheeseman, 159 Mich. App. at 727-728.