COMERICA, INC v DEPARTMENT OF TREASURY
Docket No. 161661
Michigan Supreme Court
Decided June 7, 2022
332 Mich App 155 | 507 Mich 888
Argued December 8, 2021 (Calendar No. 1).
Syllabus
Chief Justice: Bridget M. McCormack
Justices: Brian K. Zahra, David F. Viviano, Richard H. Bernstein, Elizabeth T. Clement, Megan K. Cavanagh, Elizabeth M. Welch
Reporter of Decisions: Kathryn L. Loomis
This syllabus constitutes no part of the opinion of the Court but has been prepared by the Reporter of Decisions for the convenience of the reader.
COMERICA, INC v DEPARTMENT OF TREASURY
Docket No. 161661. Argued December 8, 2021 (Calendar No. 1). Decided June 7, 2022.
Comerica, Inc., sought review in the Tax Tribunal of a 2013 decision by the Department of Treasury to deny tax credits for brownfield and historic-restoration activity that Comerica had claimed under the since repealed Single Business Tax Act (SBTA),
In an opinion by Justice CLEMENT, joined by Justices ZAHRA, VIVIANO, and BERNSTEIN, the Supreme Court held:
Tax credits that had been lawfully acquired by one Comerica subsidiary, a Michigan bank, passed by operation of law under the Banking Code,
- Former
MCL 208.38g and formerMCL 208.39c provided, in relevant part, that a qualified taxpayer could assign a credit to its partners, members, or shareholders, but that those assignees could not subsequently assign those credits or any portion of those credits. In this case, KWA was the qualified taxpayer, and it was undisputed that KWA could lawfully assign its credits to the Michigan bank. Although the Department of Treasury argued that the SBTA barred the Michigan bank, as an assignee, from becoming an assignor by subsequently assigning the credits to the Texas bank, it offered no evidence that the Michigan bank assigned, or tried to assign, the credits. Instead, as Comerica correctly argued, the credits passed to the Texas bank not by assignment but by operation of law—specifically, the Banking Code, which governs consolidations and mergers of banks.MCL 487.13703(1) provides in part that if a consolidation agreement has been certified and approved, the corporate existence of each consolidating organization is merged into and continued in the consolidated bank. To the extent authorized by the Banking Code, the consolidated bank then possesses all the rights, interests, privileges, powers, and franchises and is subject to all the restrictions, disabilities, liabilities, and duties of each of the consolidating organizations.MCL 487.13703(1) further specifies that the title to all property is transferred to the consolidated bank and may not revert or be impaired by reason of the act. While the parties disagreed about whether the credits should be considered privileges or property, this distinction made no difference to the outcome in this case because, under the Banking Code, the consolidated bank acquires both the privileges and property of the consolidating organizations, by operation of law, not by assignment or by any other act of the consolidating organizations. The distinction between a voluntary act of assignment and a transfer by operation of law was described in Miller v Clark, 56 Mich 337 (1885), and this distinction was relied on in Kim. Thus, regardless of whether the SBTA credits are considered property or privileges,MCL 487.13703 operated to transfer the credits from the Michigan bank to the Texas bank, and no assignment was needed. - The assignment provisions of the SBTA did not implicitly bar the credits from being possessed by anyone but the initial assignee. The negative-implication canon of statutory construction—expressio unius est exclusio alterius—means that the express mention of one thing implies the exclusion of other similar things. However, this canon does not apply without a strong enough association between the specified and unspecified items, according to common understandings of the specified items and the context in which they are used. In this case, the Department of Treasury offered no reason to think that the SBTA‘s mention of “assign[ing]” and not “subsequently assign[ing]” credits suggests that the Legislature meant to regulate all the waysthat credits could be transferred so that when the Legislature said only “assign” it was impliedly prohibiting other forms of transfer. Because there was no apparent contextual or circumstantial predicate for invoking the negative-implication canon, it was not applied.
- Assuming that the canon of strict construction applies to statutes regulating the possession of tax credits, it may be invoked only as a last resort. The directive to strictly construe certain tax statutes in favor of the government reflects a judicial preference against tax exemptions. However, that preference is not aimed at revealing the semantic content of a statute, and it sheds no light on the statute‘s meaning. Courts will only employ the canon of strict construction if the statutory meaning fails to emerge after the ordinary rules of interpretation are applied. Because the SBTA‘s ordinary meaning was discernible by examining the text and context of its relevant provisions, strict construction played no role in this case.
Affirmed.
Justice CAVANAGH, joined by Chief Justice MCCORMACK and Justice WELCH, concurring in the result, explained that the certificated tax credits at issue in this case, which were earned through brownfield and historic-restoration activity, flowed from the fulfillment of a contract-like arrangement between the government and a taxpayer and required the taxpayer to expend a significant amount of time, effort, and capital to earn them. She concurred with the majority that regardless of whether the certificated credits were construed as rights, interests, privileges, powers, or franchises such that Comerica-Texas simply possessed them or instead as “property” that was transferred to Comerica-Texas, neither scenario constituted an “assignment” as contemplated by the SBTA, whose single-assignment limitation did not affect how property was allocated between merging banks under
Justice WELCH, concurring in part and dissenting in part, stated that the Court of Appeals decision reached the right result but went too far in declaring the tax credits at issue in this case to be vested property rights. Under
OPINION
FILED June 7, 2022
STATE OF MICHIGAN
SUPREME COURT
COMERICA, INC., Plaintiff-Appellee, v DEPARTMENT OF TREASURY, Defendant-Appellant.
No. 161661
BEFORE THE ENTIRE BENCH
In this taxpayer protest, Comerica seeks to redeem certain tax credits over the Department of Treasury‘s objection. The credits were earned under the Single Business Tax Act by a Comerica affiliate. That subsidiary assigned the credits to another subsidiary, a Michigan bank. Later, Comerica created a third subsidiary, a Texas bank, and merged the Michigan bank into the Texas bank. Comerica then claimed the tax credits, on behalf of the Texas bank, in its Michigan tax filings. The Department of Treasury disallowed thetax credits, concluding that the Texas bank did not receive the Michigan bank‘s credits through the merger because the Michigan bank lacked the legal authority to transfer the credits. We hold that the tax credits could lawfully pass to the Texas bank.
I. BACKGROUND
Comerica, Inc. is a bank-holding corporation with many subsidiaries, of which three are relevant here. The first is KWA I, LLC. Before 2005, KWA earned tax credits relating to brownfield and historic-restoration activity. Those credits were governed in part by the Single Business Tax Act,
Around the same time, the Legislature repealed the Single Business Tax Act, see
In 2013, the Department of Treasury audited Comerica‘s returns, disallowed the claimed credits, and reduced Comerica‘s refunds accordingly. Treasury pointed to two SBTA provisions,
Comerica unsuccessfully challenged Treasury‘s decision in an informal conference before a Treasury hearing referee. Comerica then sought review before the Tax Tribunal, arguing that there had been no second assignment of the credits; rather, it argued, under Texas corporation law and Michigan banking law, the credits passed to the Texas bank as a result of the merger, “by operation of law.” Treasury argued that the credits were governed by the SBTA alone—that Texas corporation law and Michigan banking law didn‘t bear on the credits’ status. The parties cross-moved for summary disposition under
The Tax Tribunal, citing Kim v JPMorgan Chase Bank, NA, 493 Mich 98; 825 NW2d 329 (2012), acknowledged the possibility that credits could be transferred by operation of law, but it believed that Kim required such a transfer to be “unintentional or involuntary.” Any transfer here, the tribunal believed, was not “unintentional or involuntary” since Comerica had chosen to merge the transferee and transferor banks. The tribunal thus concluded that the credits had not passed to the Texas bank but rather had been “extinguished” when the Michigan bank merged into the Texas bank. In so doing, the tribunal rejected Comerica‘s argument that the credits had passed to the Texas bank under a merger provision in the Texas Business Organizations Code. That provision allocates title to “property owned by each [merging] organization to . . . the surviving or new organization[] . . . without any transfer or assignment having occurred.”
Comerica challenged the Tax Tribunal‘s ruling in the Court of Appeals, which reversed in relevant part. See Comerica, Inc v Dep‘t of Treasury, 332 Mich App 155; 955 NW2d 593 (2020). The Court of Appeals recognized that the SBTA,
Like the Tax Tribunal, the Court of Appeals recognized that, under Kim, “transfers by assignment are distinct from transfers by operation of law.” Id. at 168.
Treasury applied for our leave to appeal, arguing that the credits were unlawfully assigned when they passed from the Michigan bank to the Texas bank and that the credits were not a “vested right” or a “property right.” We granted leave, Comerica, Inc v Dep‘t of Treasury, 507 Mich 888 (2021), and now, for the reasons below, we affirm.
II. DISCUSSION
Treasury primarily contends that the tax credits at issue passed to Comerica‘s Texas bank in violation of sections 38g and 39c of the Single Business Tax Act, formerly codified at
[T]he qualified taxpayer may assign all or a portion of a credit . . . to its partners, members, or shareholders . . . . A partner, member, or shareholder that is an assignee shall not subsequently assign a credit or any portion of a credit assigned under this subsection. [Emphasis added.]
Section 39c(7) similarly stated:
[T]he qualified taxpayer may assign all or any portion of a credit . . . to its partners, members, or shareholders . . . . A partner, member, or shareholder that is an assignee shall not subsequently assign a credit or any portion of a credit assigned to the partner, member, or shareholder under this subsection. [Emphasis added.]
Both provisions said essentially the same thing: The qualified taxpayer that earned the credit “may assign” that credit, but the credit‘s “assignee shall not subsequently assign a credit or any portion of a credit assigned.” Put otherwise, the assignee cannot later become an assignor.
In the present case, KWA was the “qualified taxpayer,” and Treasury recognizes that KWA could and did lawfully assign its credits to the Michigan bank. But Treasury insists that the SBTA barred the Michigan bank, as an assignee, from becoming an assignor by “subsequently assign[ing]” the credits to the Texas bank. We agree—the statute plainly forbids the credits’ assignee to later become the credits’ assignor. But Treasury has offered nothing to suggest that the Michigan bank became an assignor, i.e., that it assigned the credits. So while the statute plainly forbade the Michigan bank to assign the credits, there‘s no evidence that the Michigan bank assigned, or tried to assign, the credits.
For its part, Comerica urges that the credits passed to the Texas bank not by assignment but by “operation of law.” In other words, the Michigan bank did not need to assign the credits to the Texas bank because the law operated to move the credits from one to the other. Comerica
If approval and certification of the consolidation agreement . . . have been completed, the corporate existence of each consolidating organization is merged into and continued in the consolidated bank. To the extent authorized by this act, the consolidated bank possesses all the rights, interests, privileges, powers, and franchises and is subject to all the restrictions, disabilities, liabilities, and duties of each of the consolidating organizations. The title to all property, real, personal, and mixed, is transferred to the consolidated bank, and shall not revert or be in any way impaired by reason of this act. [Emphasis added.]
Under this provision, the consolidated bank acquires each consolidating organization‘s “rights, interests, privileges, powers, and franchises” and becomes subject to each consolidating organization‘s “restrictions, disabilities, liabilities, and duties.” And “title to all property . . . is transferred to the consolidated bank.” As this litigation has developed, the parties have bickered about the nature of the credits, with Treasury persuading the Tax Tribunal that they are “privileges,” and Comerica persuading the Court of Appeals thatthey are “property.” Yet, as we will explain, it doesn‘t matter whether they are privileges or property since, under the Banking Code, the consolidated bank acquires the consolidating organizations’ privileges and property “by operation of law,” not by assignment or by any other act of the consolidating organizations.
When Comerica contends that the SBTA credits transfer by operation of law, we take Comerica to mean that the credits are property since the Banking Code identifies only title to “property” (and not “privileges“) as “transferred.” Notably, the act of transfer is expressed passively, with neither the “consolidating organization” nor the “consolidated bank” charged with acting to effect the transfer. It‘s true that the consolidating organizations here—the Michigan bank and the Texas bank—needed to act to effect the merger. But the Court of Appeals put it well when it distinguished “the voluntary act of merger” from “the automatic transfer of assets resulting from that merger.” Comerica, 332 Mich App at 172. Because the transfer is “automatic” under the Banking Code, it makes sense to characterize the Banking Code itself, i.e., the “law,” as effecting the transfer—hence, transfer “by operation of law.”4
Our reasoning has ample and long-standing support in our caselaw. Well over a century ago, in Miller v Clark, 56 Mich 337; 23 NW 35 (1885), we distinguished a “voluntary act” of assignment from a transfer “by operation of law“:
The assignments which are required to be recorded are those which are executed by the voluntary act of the party, and this does not apply to cases where the title is transferred by operation of law[.] [Id. at 340-341.]
We relied on Miller‘s distinction relatively recently, in Kim v JPMorgan Chase Bank, NA, 493 Mich 98; 825 NW2d 329 (2012), explaining that Miller is consistent with Black‘s Law Dictionary and emphasizing the “automatic” nature of a transfer “by operation of law“:
Miller‘s interpretation of when a transfer occurs by “operation of law” is consistent with Black‘s Law Dictionary‘s definition of the expression. Black‘s defines “operation of law” as “[t]he means by which a right or a liability is created for a party regardless of the party‘s actual intent.” Similarly, this Court has long understood the expression to indicate “the manner in which a party acquires rights without any act of his own.” Accordingly, there is ample authority for the proposition that a transfer that takes place by operation of law occurs unintentionally, involuntarily, or through no affirmative act of the transferee. [Id. at 110.5]
We continue to agree with Kim‘s and Miller‘s distinction between an assignment effected by a voluntary act and a transfer effected by an automatic, statutory process, i.e., “by operation of law.”6
As Kim and Miller show, the law itself can effect a transfer of title to property. It thus is not necessarily true, as Treasury suggests, that a transfer of the credits from the Michigan bank implies an assignment by the Michigan bank. As explained above, section 3703 of the Banking Code can trigger a transfer without an assignment. Here, if the SBTA credits are property, section 3703 operated to transfer the credits from the Michigan bank to the Texas bank. No assignment was needed.
What then if the tax credits are, as Treasury proposes, “privileges“? The answer is the same. As noted above, under section 3703, “the consolidated bank possesses all the . . . privileges . . . of each of the consolidating organizations.” The language is plain: All privileges of a consolidating organization become possessed by the consolidated bank. While the Banking Code characterizes as a “transfer” the conferring of title to property, it doesn‘t so characterize the conferring of attributes like privileges—instead, it simply declares what attributes of the consolidating organization “the consolidated bank possesses.” In any event, whether privileges are characterized as the subject of a transfer or some other thing, they are not the subject of an assignment.7
Treasury offers an alternative perspective on the SBTA‘s assignment provisions: Even if the Michigan bank didn‘t violate those provisions by becoming an assignor, thecredits couldn‘t pass to the Texas bank because those provisions implicitly barred the credits from leaving the Michigan bank‘s possession. In other words, Treasury argues that the SBTA‘s regulation of initial assignments bars the credits from afterward being possessed by anyone but the initial assignee. Treasury thus relies on the negative-implication canon, often called by its hoary epithet, expressio unius est exclusio alterius.
Under this canon of statutory construction, the express mention of one thing implies the exclusion of other similar things. Detroit v Redford Twp, 253 Mich 453, 456; 235 NW 217 (1931). As we have recently explained, however, the canon “properly applies only when the unius (or technically, unum, the thing specified) can reasonably be thought to be an expression of all that shares in the grant or prohibition involved.” Bronner v Detroit, 507 Mich 158, 173; 968 NW2d 310 (2021), quoting Scalia & Garner, Reading Law (St. Paul: Thomson/West, 2012), p 107. The canon thus does not apply without a strong enough association between the specified and unspecified items. See Chevron USA Inc v Echazabal, 536 US 73, 81; 122 S Ct 2045; 153 L Ed 2d 82 (2002). That association is evaluated according to common understandings of the specified items and the context in which they are used. See generally United States v Vonn, 535 US 55, 65; 122 S Ct 1043; 152 L Ed 2d 90 (2002); Reading Law, p 107.
Scalia and Garner illustrate this point with a couple of examples involving common restaurant signs. The first example:
The sign outside a restaurant “No dogs allowed” cannot be thought to mean that no other creatures are excluded—as if pet monkeys, potbellied pigs, and baby elephants might be quite welcome. Dogs are specifically addressed because they are the animals that customers are most likely to bring in; nothing is implied about other animals. [Reading Law, p 107.]
The second example:
Consider the sign at the entrance to a beachfront restaurant: “No shoes, no shirt, no service.” By listing some things that will cause a denial of service, the sign implies that other things will not. One can be confident about not being excluded on grounds of not wearing socks, for example, or of not wearing a jacket and tie. But what about coming in without pants? That is not included in the negative implication because the specified deficiencies in attire noted by the sign are obviously those that are common at the beach. Others common at the beach (no socks, no jacket, no tie) will implicitly not result in denial of service; but there is no reasonable implication regarding wardrobe absences not common at the beach. They go beyond the category to which the negative implication pertains. [Id. at 108.]
In each example, the negative implication is restrained by the expression of prohibitions (dogs or going shirtless or shoeless),
Here, the question is whether the SBTA‘s mention of “assign[ing]” and not “subsequently assign[ing]” credits suggests anything about how credits otherwise pass between entities. Treasury offers no reason to think that the Legislature meant to regulate all the ways that credits could be transferred so that when the Legislature said only “assign” it was impliedly prohibiting other forms of transfer. For instance, by analogy to the “no dogs allowed” example, Treasury might have asserted that “assigning” is singled out in the statute because it is “the action that tax-credit holders are most likely to perform.” To be clear, that reasoning sounds dubious to us, but the point is that Treasury hasn‘t explained how expressly regulating credit assignments implies anything about how credits can otherwise change hands; nor has it pointed to any language in the SBTA suggesting anintention to regulate all transfers of tax credits.8 Unlike restaurant signs’ expression of “dogs” or of seaside sartorial omissions, the SBTA‘s expression about “assigning” implies very little, in our “[c]ommon sense.” Bronner, 507 Mich at 173, quoting Reading Law, p 107.9
In short, we see no contextual or circumstantial predicate for invoking the negative-implication canon, and so we decline to apply it here.
Treasury has urged us to “strictly construe” the SBTA‘s tax-credit provisions against Comerica. We initially question whether the canon of strict construction applies to statutes governing tax credits. This case doesn‘t ask us to determine whether those tax credits were appropriately awarded in the first place—Treasury hasn‘t disputed that KWA earned them fair and square. We‘re instead looking at provisions governing how those credits can pass between a corporation‘s subsidiaries. It is not obvious that provisions like that should be “strictly construed.”
But even if the “canon of strict construction” applies to statutes regulating the possession of tax credits, it may be invoked only as a “last resort.” TOMRA of North America, Inc v Dep‘t of Treasury, 505 Mich 333, 343; 952 NW2d 384 (2020). As werecently explained, the directive to strictly construe certain tax statutes in favor of the government reflects a judicial “preference against tax exemptions.” Id. at 340. That preference, whatever its merit, isn‘t aimed at “reveal[ing] the semantic content of a statute,” id. at 343—that is, it doesn‘t “shed any light” on the statute‘s meaning, id. at 342. Only if that meaning fails to emerge after we apply “the ordinary rules of interpretation” may we put our thumb on the scales and construe a statute against the taxpayer. Id. at 343. Here, as indicated above, the SBTA‘s “ordinary
III. CONCLUSION
This appeal asked us to decide whether tax credits lawfully acquired by one Comerica subsidiary, a Michigan bank, could lawfully pass to another Comerica subsidiary, a Texas bank, when the two banks merged. As explained above, the Single Business Tax Act barred the Michigan bank from assigning the credits, but no such assignment was attempted here. Rather, the Banking Code let the Texas bank acquire the credits “by operation of law.” The SBTA did not explicitly or implicitly interfere with the Banking Code‘s operation.
For these reasons, we conclude that the credits could lawfully pass to the Texas bank. We, therefore, affirm the Court of Appeals’ judgment.
Elizabeth T. Clement
Brian K. Zahra
David F. Viviano
Richard H. Bernstein
CAVANAGH, J. (concurring in the result).
This case involves a dispute over certificated tax credits issued under the now long-repealed Single Business Tax Act (SBTA), former
Similarly, under the SBTA, property owners were incentivized to rehabilitate and preserve historic properties in exchange for tax credits. To obtain a historic-restoration credit, the taxpayer would apply for certification from the State Historic Preservation Office or the National Parks Service, submit a rehabilitation plan, and, upon completion of the project, seek a certificate of completed rehabilitation. If the rehabilitation was in conformity with the plan approved, a certificate of completion was issued, making the taxpayer eligible for a 25% credit for qualified expenditures. Like the brownfield credits discussed earlier, the historic-restoration credit was also able to be carried forward
The credits at issue were earned by a Comerica, Inc., affiliate and subsequently assigned to a Comerica subsidiary (Comerica-Michigan). Comerica-Michigan latermerged with another Comerica subsidiary (Comerica-Texas). Because the SBTA prohibited a subsequent assignment of the certificated tax credits, former
I concur with the majority that, whether the certificated credits are construed as either “rights, interests, privileges, powers, [or] franchises” such that Comerica-Texas simply “possesses” them or as “property” such that it was “transferred” to Comerica-Texas, neither scenario constitutes an “assignment” as contemplated by the SBTA. The SBTA‘s single-assignment prohibition does not affect how property is allocated between merging banks under
the expressio unius est exclusio alterius canon of statutory interpretation as particularly applicable in this case. As the majority explains, this canon is animated by context and reasonability. See Bronner v Detroit, 507 Mich 158, 173; 968 NW2d 310 (2021). The SBTA‘s limitation on single assignments is simply not sufficient to suggest an exclusive or exhaustive means of transfer.
For these reasons, I agree that the Court of Appeals’ decision should be affirmed, and I concur in the result reached by the Court majority.
Megan K. Cavanagh
Bridget M. McCormack
Elizabeth M. Welch
WELCH, J. (concurring in part and dissenting in part).
I join Justice CAVANAGH‘s concurring opinion. We can resolve this case by focusing less on legal abstractions and instead returning to first principles of how this Court has historically interpreted tax-related statutes. This Court has long recognized “that taxing is a practical matter and that the taxing statutes must receive a practical construction.” In re Brackett‘s Estate, 342 Mich 195, 205; 69 NW2d 164 (1955). Substance governs over form. See 23 Michigan Civil Jurisprudence, Taxes, § 37, p 222 (“A court, in reading taxation statutes, should disregard form for substance and place an emphasis on economic reality.“). It is a “black-letter principle that ‘tax law deals in economic realities, not legal abstractions.‘” PPL Corp v Comm‘r of Internal Revenue, 569 US 329, 340; 133 S Ct 1897; 185 L Ed 2d 972 (2013), quoting Comm‘r v Southwest Exploration Co, 350 US 308, 315; 76 S Ct 395; 100 L Ed 347 (1956). Applying this lens, this case is easily resolved.
The parties agree on the basic facts. Petitioner‘s subsidiary earned brownfield-restoration and historic-preservation tax credits by completing certain approved projects. In accordance with the applicable statutory scheme—the since repealed Single BusinessTax Act (SBTA), former
I think the Court of Appeals decision reached the right result but went too far in declaring the tax credits at issue in this case “vested” property rights. This Court has never understood tax credits in this manner, and it was unnecessary for the Court of Appeals to do so here. Viewing tax credits as vested property rights has the potential to greatly disturb our state government‘s system of taxation. Unsurprisingly, our Court of Appeals in an earlier decision held that “because any ‘rights’ that arise under a tax statute are purely a result of legislative ‘grace,’ the Legislature is free to take such a ‘right’ away at any time . . . .” Ludka v Dep‘t of Treasury, 155 Mich App 250, 259-260; 399 NW2d 490 (1986) (finding “no vested right in a foreign tax credit” or “in a tax statute or in the continuance of any tax law“). Similarly, although never speaking in such absolute terms, this Court has held that the Legislature, within the limits of the Constitution, has broad discretion over taxation. Hudson Motor Car Co v Detroit, 282 Mich 69, 79; 275 NW 770 (1937). This Court emphasized, however, that broad discretion is not limitless discretion. Id. For instance, “[t]he control of the state in regard to taxation . . . can not be exercised in an arbitrary manner, nor without regard to those principles of justice and equality on which it is based.” Ryerson v Utley, 16 Mich 269, 276 (1868).
In order to resolve the statutory question presented in this case, we should only have to look at the economic realities. The Legislature has chosen to create incentives for brownfield restoration and historic preservation. Rather than supporting such efforts directly, the Legislature subsidizes that pursuit through tax policy. Cf. United States v Hoffman, 901 F3d 523, 537 (CA 5, 2018) (“Tax credits are the functional equivalent of government spending programs.“). The Legislature has imposed specific controls on how the credit is earned and how it can be claimed. As relevant here—and as the parties agree—the Legislature allows only a single assignment to a qualifying partner, member, or shareholder. The parties also agree—and it is abundantly clear—that there was never a prohibited successive assignment between Comerica-Michigan and Comerica-Texas. Instead, Comerica-Texas claims
As our Court of Appeals has recognized, “the effect of a merger or consolidation on the existing constituent corporations depends upon the terms of the statute under which the merger or consolidation is accomplished.” Handley v Wyandotte Chems Corp, 118 Mich App 423, 425; 325 NW2d 447 (1982). In this case, the merger proceeded under
As a practical matter, not only is there no statutory prohibition on Comerica-Texas claiming the disputed tax credits by the terms of the merger, it would be grossly unjust and contrary to legislative intent to hold otherwise. It would make little sense to find Comerica-Texas subject to Comerica-Michigan‘s tax liabilities as the result of the merger but not its earned tax credits resulting from Comerica-Michigan‘s real-life efforts to redevelop brownfields and historic properties. The cascading effect of disallowing these credits would be that future businesses will decide against redeveloping properties that earn the credits, which would damage the Legislature‘s goal of monetarily incentivizing these private-public redevelopment partnerships. The state must be held to its side of the bargain, and I see no reason to think that there was ever any intention on the part of the state to disallow petitioner from claiming the earned tax credits in this situation.2
For these reasons, I concur in part and dissent in part.
Elizabeth M. Welch