815 N.W.2d 811
Mich. Ct. App.2012Background
- Plaintiff Uniloy Milacron USA, Inc. (UMI affiliate) entered a distributor agreement with Uniloy Milacron, Inc. (UMI) to market and resell plaintiff’s molds; UMI solicited orders, but title transferred at some point before customers acquired the products.
- Plaintiff’s Tecumseh plant shipped most products to customers outside Michigan; UMI never possessed the products during distribution.
- For 2003–2005, plaintiff sourced sales based on destination of shipment; the Department assessed additional Michigan SBT based on all sales being Michigan sales for the sales factor.
- Plaintiff sued in the Court of Claims for a refund, moving for summary disposition; defendant cross-moved for summary disposition in its favor.
- The Court of Claims granted summary disposition in plaintiff’s favor, determining not all sales could be apportioned to Michigan under the SBTA.
- The SBTA has since been repealed; the case relies on the SBTA framework as in effect for the tax years at issue.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Michigan sources all sales to Michigan under MCL 208.52(b). | Plaintiff argues sales should not be Michigan-sourced since UMI never took possession. | Defendant argues the sale was delivered to Michigan because products were shipped from Michigan and never left Michigan before sale to UMI. | No; sales were not sourced to Michigan under 208.52(b) as there was no delivery or shipping to Michigan. |
| Whether the Court of Claims properly decided that not all plaintiff’s sales could be apportioned to Michigan. | Plaintiff contends some sales should be Michigan-sourced for apportionment. | Defendant asserts all sales were Michigan sales for apportionment purposes. | Held that not all sales could be apportioned to Michigan. |
| Whether the Court of Claims properly relied on a draft revenue administrative bulletin (RAB) in its reasoning. | Plaintiff argues RAB supports its position and should be persuasive. | Defendant argues RAB is merely interpretive and not controlling law. | RAB was persuasive but not controlling; result otherwise consistent with statute. |
Key Cases Cited
- Guardian Photo, Inc v Dep’t of Treasury, 243 Mich App 270 (2000) (statutory interpretation framework; plain meaning governs when unambiguous)
- Ammex, Inc v Dep’t of Treasury, 273 Mich App 623 (2007) (plain language governs; term ambiguity controls reading)
- TMW Enterprises, Inc v Dep’t of Treasury, 285 Mich App 167 (2009) (ambiguous terms; dictionary can aid interpretation)
- Fluor Enterprises, Inc v Dep’t of Treasury, 265 Mich App 711 (2005) (SBTA apportionment framework; three-factor formula relevance)
- Ford Motor Co v Dep’t of Treasury, 288 Mich App 491 (2010) (statutory interpretation and de novo review of tax statutes)
- JW Hobbs Corp v Dep’t of Treasury, 268 Mich App 38 (2005) (RAB interpretation; administrative bulletins as persuasive.)
- Taylor v Laban, 241 Mich App 449 (2000) (deferring to correct result even if reasoning differs)
- PIC Maintenance, Inc v Dep’t of Treasury, 293 Mich App 403 (2011) (statutory language cannot be read into unambiguous terms)