General Motors Corp. v. Department of Treasury
290 Mich. App. 355
| Mich. Ct. App. | 2010Background
- GM challenged use-tax refunds for employees’ use of GM-program vehicles ( Oct 1, 1996– Aug 31, 2007).
- Betten Auto Center decision interpreted resale/demonstration exemptions under MCL 205.94(l)(c) and limited demonstration exemptions by vehicle counts.
- 2007 PA 103 retroactively amended Use Tax Act to conform to Betten; taxed interim uses and conversions from exempt to taxable uses.
- Court of Claims held retroactive effects violated GM’s due process and special-legislation provisions and that program vehicles were exempt.
- This Court reversed, holding GM did not qualify for resale or demonstration exemptions and that 2007 PA 103 retroactivity satisfies due process under Carlton and related standards.
- GM cross-appeal argued Taking Clause and Title-Object Clause, among others; these were addressed below.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether 2007 PA 103 retroactively applies | GM argues retroactivity harms due process | Treasury asserts retroactivity rational and necessary | Yes, retroactivity permissible under due process |
| Whether 2007 PA 103 violates special-legislation ban | GM contends retroactivity targets GM specifically | Treasure argues statute general applicability | No; not special legislation |
| Whether GM qualifies for resale or demonstration exemptions | GM manufactured vehicles; exemptions apply to purchased assets | Exemption requires purchase or appropriate use | No; GM did not purchase, and program vehicles not used as retail demonstrators |
| Whether the retroactivity period is properly limited | GM seeks broader retroactivity | Legislature intended broad retroactivity to limit refunds | Legislation extends retroactivity to open tax years as allowed |
| Whether 2007 PA 103 compliance with Title-Object Clause | GM argues title insufficient for retroactive scope | Act’s general object supported by its amendments | Yes; title satisfies constitutional requirements |
Key Cases Cited
- Carlton v. United States, 512 U.S. 26 (U.S. 1994) (modest retroactivity permissible for tax legislation; rational basis)
- Welch v. Henry, 305 U.S. 134 (U.S. 1938) (historical retroactivity considerations in taxation)
- GMAC, LLC v. Department of Treasury, 286 Mich. App. 365 (Mich. Ct. App. 2009) (exemption construction and retroactivity framework in Michigan)
- Betten Auto Center v. Department of Treasury, 272 Mich. App. 14 (Mich. Ct. App. 2006) (exemption for resale/demonstration under pre-2007 statute; foundation for Betten/2007 amendment)
- Betten Auto Ctr, Inc. v. Department of Treasury, 478 Mich. 864 (Mich. Sup. Ct. 2007) (Supreme Court affirmed part of Betten; clarified exemption scope)
- Wylie v. Grand Rapids City Comm., 293 Mich. 571 (Mich. 1940) (separation of powers and legislature’s role)