Menard Inc. v. Department of Treasury
302 Mich. App. 467
| Mich. Ct. App. | 2013Background
- Retailers entered private label credit card (PLCC) programs with financing companies; retailers remitted sales tax to the treasury at point of sale and were reimbursed by lenders for the tax and sale amount; when customers defaulted, lenders wrote off bad debts; retailers sought sales tax refunds for bad debts under MCL 205.54i; the 2007 amendment (PA 105) to MCL 205.54i and related definitions created a lender/taxpayer framework with an election mechanism and retroactive effect; the court held the amendments control and the retailers are not entitled to refunds under the bad debt provision.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether retailers and lenders qualify as taxpayers for the bad debt refund | Retailers + lenders should qualify under the amended statute | Amendments treat taxpayer and lender separately; no entitlement | Not entitled; statute is strictly construed against taxpayers |
| Effect of the 2007 amendments and retroactivity | Amendments should allow the DaimlerChrysler-like unitary treatment | Amendments supersede DaimlerChrysler; retroactive and limiting | Amendments control; retroactive to permit election; refunds denied |
| Role of the word 'or' in defining 'taxpayer' and 'lender' | 'Or' shows alternative entitlement of either party to claim deduction | 'Or' denotes two distinct entities; not interchangeable | Two entities are distinct for entitlement; retailers not allowed refund |
Key Cases Cited
- DaimlerChrysler Servs North America LLC v Dep’t of Treasury, 271 Mich App 625 (2006) (group may act as a unit for taxpayer status (abrogated by statute))
- GMAC LLC v Dep’t of Treasury, 286 Mich App 365 (2009) (statutory framework governs deduction; burden on claimant; exemptions strictly construed)
- Whitman v City of Burton, 493 Mich 303 (2013) (statutory interpretation emphasizes legislative intent and plain meaning)
- In re Receivership of 11910 South Francis Rd, 492 Mich 208 (2012) (statutory interpretation and context for agency action)
- City of Detroit v Detroit Commercial College, 322 Mich 142 (1948) (exemptions must be expressed in clear terms; tax exemptions strictly construed)