*1 11 Co Donovan 1983] DEPARTMENT OF COMPANY v CONSTRUCTION DONOVAN TREASURY 4, 1983, Lansing. January No. 61213. Submitted Docket Decided applied 18, appeal May for. 1983.Leave to (Donovan), Company a Minnesota Construction Plaintiff Donovan operates business. Dono- corporation, multistate construction a subsidiary construc- number of shareholder of a van is the sole (Utley- including plaintiff Utley-James, companies, Inc. tion Donovan, Utley-James James), Michigan corporation. and (Donovan Construc- subsidiaries of Donovan construction other operation. unitary Group) engaged Dono- in a tion are separate Utley-James originally income tax re- filed van and on a years and 1973. Donovan filed 1972 turns for using accounting Utley-James separate filed basis and payroll property, sales. Based on and formula of three-factor Group’s unitary busi- of the Donovan Construction nature together ness, Utley-James, members with other and Donovan Group, filed second thereafter the Donovan Construction corporate tax returns for income amended using unitary the three-factor 1973 on the basis 1972 and including corporations ventures involved and formula and Group. amended returns Construction in the Donovan $339,337 plus requested interest. in the amount of a refund defendants, Treasury, Department Division and Revenue Revenue, plain- Goodman, Sydney denied D. Commissioner [1, [3-5] [6] [7, [8] [11] [10] Validity, Construction 2] 71 Am Jur 61A Am Jur by, Purposes Act. 8 ALR4th 934. 4 Am Jur 5 Am Jur 71 Am Jur Am 71 Am Jur 5 Am Jur income of Jur under Federal 2d, 2d, 2d, Appeal 2d, Appeal and Error 476. 2d, References 2d, 2d, 2d, State and Local Taxation foreign corporation. State and Local Appeal Pleading 230 et State and Local Taxation application State and and Error §§ Constitution, and Error § § Local Taxation 576. of Uniform Points in Headnotes Taxation 593. seq. 67 545 et of state tax ALR2d 1322. § Division of § 605. § seq. § 577. on, Income for Tax or measured using permission tiffs file method and concluded separate accounting Plaintiffs, proper. method thereafter, Ingham initiated this action in the Circuit Court refund, I, $339,337 interest, plus seeking, in count income tax *2 alternative, based on the first amended returns. In the in count II, $212,380 refund, interest, sought plus a income tax Donovan then based the second returns. Plaintiffs filed a on amended partial judgment summary motion for and the defendants filed court, judgment. summary a for cross-motion The trial Thomas Brown, J., opinion granting plaintiffs’ L. issued an and order I, ordering as to an motion count income tax refund of $339,337, plus per interest at annum from March 9% filed, the the combined returns were date and costs. The defen- appeal alleging proper in the dants errors determination of the apportionment granting summary method and the judgment. Held: correctly trial court found that the mere fact that separate accounting greater liability a disclosed was insuffi- provisions provided cient to invoke the relief in the Income Tax Act. apportionment 2. The three-factor is to method be used taxpayer engaged unitary business; where a multistate in a only formulary apportionment fairly represent if does not the taxpayer’s activity the may extent of business in the state a method, separate accounting, employed. different such as party seeking employ apportionment 3. The an alternate showing formulary appor- method has the burden of that the inappropriate by convincing tionment method is clear and evidence. The evidence introduced to overcome formula method of allocation must address each element the formu- Here, equation. department la’s compo- did not attack the formulary apportionment nents of the an method on individual upon gross disparity respec- basis but instead relied in the computations. tive inadequacy 4. The of the three-factor in a formula case by comparing cannot be established the dollar results obtained taxpayer’s sepa- under it with the results obtained under the ' accounting. inadequacy rate method of of the three-factor formula can be established if the state can meet the burden of showing by fairly sufficient evidence that the does formula not represent taxpayer’s the extent of the business activities within the state. department policy 5. Because the admitted that its is to require unitary business to file a combined return and thus Co v Donovan below, precluded raising from this issue it is now failed raise appeal. it for the first time on unequivocally department conceded that Donovan was 6. The admission, enterprise. unitary a result of such As upon by allegations were trial court. admitted not ruled Therefore, precluded challenging such Appeals allegations appeal. declined to remand The Court of commissioner had a rational a determination whether the basis, accept to refuse to Donovan’s amended under § combined tax returns. from the date the is awarded interest at 7. Plaintiff 9% returns, rather refused to the amended commissioner filed. the combined returns were
than from the date Affirmed, as modified. Allen, P.J., opinion agrees majority He dissented. with respects except he the case should be remanded in all feels of whether the commis- to the circuit court for a determination given him properly under 335§ sioner exercised discretion returns. He would not read
to disallow the amended combined admission, Attorney the Donovan Construc- General’s Group required to file tion business entitled *3 basis, going as so far as to its tax returns on a combined 335 to eliminate commissioner’s broad discretion under § reject good if should to refuse to the returns cause exist granting in that the court erred the returns. He feels trial summary judgment question since a of fact existed as to Group awas unified busi- whether the Donovan Construction enterprise fairness and current case law ness whose combined hearing. evidentiary for an The broad authorize a remand Appeals powers upon the of- authorize the conferred Court ought any order which to have been or Court issue made.
Opinion of the Court Taxpayers Apportion- — — —Tax 1. Taxation Income Business Apportionment — Methods. ment of Taxes Alternative Michigan provides any having taxpayer Tax Act The Income activity income is taxable within and from business which Michigan apportion his income without shall allocate and net provided act; by providing an as relief in the act affords apportionment formulary where alternative method of represent apportionment fairly does method not extent (MCL 206.103, taxpayer’s activity state business within the 206.195; 7.557[1103],7.557[1195]). MSA Taxpayers Apportionment — — 2. Taxation Multistate of Taxes Compact. — Multistate Tax member, Compact, Michigan The Multistate Tax of which is a provides taxpayer may apportion that a multistate elect to may in with allocate its income accordance state law or elect to apportion and allocate its income accordance with the com- (MCL apportionment 205.581; pact’s three-factor formula MSA 4.146[101]). Taxpayers Unitary — — — 3. Taxation Multistate Businesses Apportionment Apportionment — of Taxes Alternative Methods. taxpayer engaged unitary
A who is multistate in a business is to apportionment use the three-factor method to determine his taxes; liability for income a different method separate accounting, apportionment, may employed such as only formulary apportionment fairly represent if does not (MCL taxpayer’s activity extent of the business in the state 206.115, 206.195; 7.557[1115],7.557[1195]). — Taxpayers Unitary — — Multistate Taxation Businesses Apportionment Apportionment — of Taxes Alternative — Methods Evidence. party seeking employ appor- an alternate method for the unitary tionment of income taxes of a multistate business has showing formulary apportionment the burden of inappropriate by convincing evidence; method is clear and evidence introduced to overcome the formula method of alloca- equation, tion must address each element of the formula’s being property, payroll and sales. Taxpayers Unitary — — — 5. Taxation Multistate Businesses Apportionment — — of Taxes Three-Factor Formula Alter- Apportionment native Methods. inadequacy appor- of the three-factor formula used tionment of income taxes of a multistate by comparing cannot be established the dollar results obtained taxpayer’s sepa- under it with the results obtained under the *4 accounting; inadequacy rate method of of the three-factor formula can be established if the state can meet the burden of showing by fairly sufficient evidence that the formula does not represent taxpayer’s the extent of the business activities within state, however, requires to do so an attack on each element formulary apportionment. of the Donovan Co v Reporting — — 6. Taxation Combined Commissioner of Revenue. given discretionary power The Commissioner of Revenue is under reject reporting the Income Tax Act to or the combined (MCL206.335; 7.557[1335]). of income MSA Appeal Preserving — — 7. Admissions. Question party allegations precluded challenging A who admits is where, allegations appeal party’s such on as a result of the admission, allegations upon by admitted were not ruled trial court. by Allen,
Dissent P.J. Appeal Corporate — — — 8. Taxation Commissioner of Revenue Unitary Reporting — — Tax Returns Combined Businesses Summary Judgments. — question properly of whether the Commissioner Revenue regarding exercised his discretion under the statute corporate determining corpora- tax returns in that a defendant enterprise tion was a unified business under the statute is a fact; question question where such a of fact exists a sum- mary judgment generally inappropriate appears unless it impossible supported by that it is for the claim to be evidence (MCL206.335; 7.557[1335J). at trial Appeal Preserving — 9. Question. appellate only points
The fact that an court examines that have properly preserved been trial does not limit that court’s power prevent injustice. fundamental Appeal — Changes Applicable — Remand Law. suggests remand, may Fairness in order that the trial court reconsider, Appeals rather than a reversal the Court of granted authority where a motion to dismiss has been applicable appeal law as it then existed and where after an appeal subsequent taken and the briefs filed on decision is changing prevailing announced the former law. — Appeals — — 11. Courts Court of Powers Court Rules. powers upon Appeals broad conferred the Court of authorize any ought the Court to issue order which to have been (GCR1963, 820.1[7j). made Luptak Evans & D. (by Michael Kratchman Tomorsky),
Dennis F. plaintiffs. *5 Opinion of the Court General, Louis J. Kelley, Attorney J. Frank General, Richard R. Roesch Caruso, and Solicitor General, Gomoll, Attorney P. Assistants Terry and for defendants. Wahls, Allen, P.J., and and Bronson
Before: JJ. and Department of
Per Curiam. The right as of appeal of Revenue Commissioner 12, 1981, entered November summary judgment Court, awarding Ingham County in the Circuit income refund corporate interest, $339,337, for the plus years and 1973. (Donovan) is a Company
Donovan Construction in the corporation engaged operation Minnesota construction and electric util- general a multistate construc- system and distribution ity transmission It is the sole shareholder of a num- tion business. includ- companies, ber of construction subsidiary (Ut- Inc., Michigan corporation ing Utley-James, Donovan, co-plaintiff this suit. ley-James), together with and other construction Utley-James (Donovan of Donovan Construction subsidiaries operation. in a Group), engaged Group frequently Donovan Construction bids, exchanges makes transfers joint equipment, personnel, and purchasing establishes common personnel procedures, solicits business for and group makes sales between other members of the provides and intercorporate financing within addition, In group. personnel the executive integrated Donovan Group fully Construction provides management and centralized control over arranges the activities of the all group. Donovan financing group, approves for the members of the significant capital acqui- all bids and construction Treasury Dep’t Co Donovan Opinion of the Court sitions, levels and salary requires sets bonuses and periodic reports, budgets statements and for re- view itself. and Utley-James originally sepa-
Donovan filed rate income tax returns 1972 and 1973. original Donovan filed its returns on a separate basis, accounting Utley-James original filed its *6 using returns three-factor formula. The income tax returns had Utley-James been previously Michigan audited the State of and its use of the three-factor formula had been ap- reviewed and proved.
Based on the nature unitary Donovan business, Group’s Construction Donovan and Ut ley-James, together with the other members of the Group, Donovan Construction filed second Michigan corporate amended combined income tax 1971, returns for 1972 and 1973 on the unitary using including basis the three-factor formula and corporations and ventures in involved Donovan Construction Group. The returns were filed pursuant Michigan 335 of the Income § 7.557(335).1 1967, 206.335; Tax Act of MCL MSA The requested amended returns a refund in the $339,337, amount of plus interest. department
The denied plaintiffs’ request for a refund on the basis that: department
"This
always permitted
required
has
and
adequate job
construction
contractors who maintain
separate accounting
cost records to file on a
basis.
Michigan
"Sec. 195 of
permits
Income Tax Act
filing
corporate
income tax
on
returns
a combined basis
the instant case fell under
335 of the
Income Tax Act of
1967,
amended,
7.557(1335).
206.335;
corporate
as
MCL
MSA
repealed by
replaced by
single
income tax was
ever it more 1971, original returns filed for in this state. The adequate schedules for us to conclude 1973 contain and accounting properly your activity reflects separate request permis- Michigan. Your the State of within Michigan corporation income tax returns to file sion using respectfully denied.” method is plaintiffs 4, 1976, In initiated this suit. June On sought plaintiffs $339,337 I, income tax count plus interest based on the second amended refund alternative, In in count II Donovan returns. sought plus $212,380 income tax refund interest depart- the first amended returns. The based on 22, filed on June 1976. Plain- ment’s answer was request September filed tiffs’ 21, 1977, for admissions was 3,
and answered on October 1977. On partial their filed mo- October summary judgment, based on GCR tion for (2) January 19, 1978, 117.2, subds On plaintiffs’ partial department answered motion for *7 summary judgment and filed its cross-motion for 117.2(3). summary judgment, based on GCR Judge 14, 1981, Circuit Thomas L. On October Brown issued his opinion, granting plaintiffs’ mo- partial summary judgment tion for as to count I. opinion An order consistent with the was entered ordering 12, 1981, on November an income tax plus per $339,337, refund of interest at annum 9% 23, 1975, from March re- the date the combined filed, turns were and costs. controversy
The chief in this case whether formulary appor- employ are entitled to provide separate accounting tionment to or must Michigan liability. determine their income tax dispute accuracy any There is no relative to the of computations. Rather, the focuses on the case Donovan Co Opinion op Court whether proper apportionment method and proper method to summary judgment controversy. decide this Applicable Statutory
I. The Provisions Act, Income Tax 206.1 et MCL 7.557(101) seq.; seq., MSA et provides any having income taxpayer activity which is taxable within without and this state shall apportion allocate and his net income as provided in 206.103; act. MCL MSA 7.557(1103). This is a version the Uniform Divi- 7A, sion of for Tax Purposes Income Act. See Annotated, Uniform Laws Business & Financial Laws, p 93. For years provided following act formulary appor- tionment method 206.115; MCL MSA 7.557(1115): income, "All business other than income from trans-
portation services, domestic insurers and or- financial ganizations, apportioned by shall to this multi- state plying fraction, the income numerator property which is the plus payroll plus factor factor factor, the sales and the denominator of which is 3.” PA 233 deleted the words "domestic insurers and [1975 organizations” following financial "transportation ser- vices”.] factors, sales,
The three are property, payroll and 206.123; defined in MCL 206.116 7.557(1116) 7.557(1123). For formu- cases where lary apportionment represent does not fairly extent of the within taxpayer’s business activity state, this 195 of provi- the act affords a relief sion: *8 "If provisions and apportionment allocation fairly represent
this act taxpay- do not the extent of the [May- Opinion of the Court state, may taxpayer activity in this er’s business respect may require, in the commissioner petition for or activity, if taxpayer’s business any part of the
to all or reasonable:
"(a) accounting; Separate only with method will be effective "An alternative 206.195; MCL MSA by the commissioner.” approval 7.557(1195). Compact, Tax the Multistate Michigan joined seq., 4.146(101) et seq.; MCL 205.581 et in MSA multistate taxpayer may It provides its income in accor- to or allocate apportion elect apportion to may state law or elect dance with in accordance with Article IV its income allocate 205.581, III(l); art MSA MCL compact. III(l). multi- 4.146(101), permits IV art Article by using to its income taxpayer apportion state formula similar to apportionment three-factor formula contained in Michigan apportionment 7.557(1115). 205.581, 206.115; MCL art MCL MSA IV(9). 4.146(101), also IV(9); compact art MSA 206.195; to MCL provision contains a relief similar 7.557(1195). 205.581, IV(18); art MSA MCL IV(18). 4.146(101), art Application of Section
II. "gross dispar- contends to ity” between income attributable and Mich- plaintiffs under the three-factor formula under igan income attributable to re- separate amended accounting second justify turns is in itself a sufficient reason to commissioner under authority exercise his Dono- separate accounting method. employ returns, accounting, original using separate van’s *9 Donovan Co v 21 Opinion of the Court following disclosed Donovan earned the amounts its construction contracts: Year Income $495,902.96 1971 1972
824,726.38 1,623,643.07
1973 By using contrast, returns, the second amended apportionment formula, the three-factor the attributed following Michigan: income to (or Loss)
Year Income $740,246.00 1971 1972
321,296.00 (84,724.00) 1973 —Loss argue, found,
Plaintiffs and the trial court separate accounting the mere fact that disclosed a greater liability was insufficient to invoke the Where the provisions agree. relief 195.2 We engaged taxpayer is in multistate busi- (see infra), appor- ness issue IV the three-factor Only formulary tionment method is to be if used. apportionment fairly represent does not the extent taxpayer’s activity may of the business in the state separate accounting, method, a different such as employed. party seeking employ an alter- apportionment nate method has the burden of showing apportionment formulary that the method inappropriate convincing is clear and evidence. McColgan, See Butler Bros v 315 501; US 62 S Ct (1942); Trucking Johnsbury 701; 86 L 991 Ed St 2 application "In separate accounting the instant case the of the solely gross disparity on the basis that there is a in the results between separate the different methods results in use of accounting liability greater sepa because the tax and not because accounting accurately rate unitary corporate taxpayer’s more reflects the that, opinion business in the state. This Court gross disparity results, addition to the between the additional evi demonstrating statutory dence should be considered in inadequately inaccurately represents taxpayer’s formula tary uni activity taxing in the state.”
22 126 11 Opinion of the Court 209, 212; Co, 118 NH 385 Hampshire, Inc v New Co, (1978); A2d Deseret Pharmaceutical Comm, (Utah, Inc v State Tax 579 P2d 1978). See, Warren, Keesling & Califor generally, Purposes nia’s Uniform Division of Income for Tax (Part I), Act 15 UCLA L Rev 156 Evidence introduced to overcome the formula method of allocation must address each element of the for equation. McColgan, mula’s Butler Bros Cal 664, 677-678; (1941), 2d 111 P2d aff’d 315 *10 (1942). 501; 701; 86 L US 62 S Ct Ed 991 by As was stated Professor William J. Pierce of of University Law School and drafts- of man the uniform act: Act, adopted every having "The Uniform if state income, by net income tax or a tax measured assure that 100 less, net would income, percent of and no more or no Pierce, would be taxed.” The Uniform Division of Purposes, Income for State Tax 35 Taxes (1957). purpose Because the whole of the uniform act could totally destroyed depart- if the revenue ment in each permitted state were to cast aside the three-factor formula it merely yielded because than less an alternate apportionment, method of the courts have held that the inadequacy of the three-factor formula cannot be established com- paring the dollar results obtained under it with the results obtained under the taxpayer’s separate method of accounting. Mobil Corp Oil v Vermont Taxes, 425; 1223; Comm’r of 445 US 100 Ct 63 L S (1980); Ed 2d 510 v ASARCO Idaho State Tax Comm, 307; 458 US 3103; S Ct L73 Ed 2d 787 (1982); However, Butler Bros McColgan, v supra. of inadequacy the three-factor formula can be established if the state can meet the burden of Treasury Dep’t Donovan Co Opinion of the Court showing by that sufficient evidence the formula fairly represent taxpay- does not the extent of the er’s business activities within the state. To do so requires an attack on each element of formu- lary apportionment.
"The Butler Brothers
case demonstrates
production
separate accounting
mere
of a
system for
one
or unitary
of the branches of an entire
business
insufficient
more
apportion-
without
to overthrow an
sales,
appropriate
ment formula
on the
of
based
factors
property
payroll.
The fairness of the three-factor
thereby
Only
formula
if
taxpayer
settled.
can
meet
of showing by
the burden
sufficient evidence that
apportion
formula
allocation
does not
to California
part
the entire net
reasonably
income
attribut-
able to the
done in the
state will the court
disapprove
particular
use in
its
case.
evidence
overcome
introduced to
the formula method
alloca-
go
tion must
each element
equation.”
formula
added.)
(Emphasis
McColgan,
Edison California Stores v
472, 479;
30 Cal
2d
P2d 16
components
did not attack the
formulary apportionment
method
an
"gross
individual
but
basis
instead relied on the
*11
disparity”
respective computations.
in the
Sons,
Maxwell,
cites Hans Rees’
Inc v
(1931);
283
123;
US
51 S
385;
Ct
75 L Ed 879
Norfolk
Comm,
& W R Co v Missouri State Tax
(1968);
317;
390 US
995;
88 S Ct
L19 Ed 2d 1201
Mfg
Bair,
Moorman
Co
267;
v
437 US
S 98 Ct
(1978),
supporting
2340;
24 Opinion op the Court in- However, that all of the cases cited we note apportion- the formulary situations where volved then greater appropriate resulted in a ment transacted within considering the business All of the cases cited limited state’s state. three-factor formula. None of application in in- involved the situation found the cases "gross disparity” stant case where the used applica- tax than would result higher levy apportionment tion of the three-factor method. Discretionary 335 III. Power Under Section Act, Under 335 of the Income Tax § to the Commissioner discretionary power reject reporting. of Revenue to or 7.557(1335).3 In Clarke-Gravely 206.335; MCL Corp Dep’t Treasury, 484; 315 NW2d (1982), 335 was construed. broadly Justice § Fitzgerald in dissenting opinion: wrote his discretionary language
"Inherent
of 335 is
authority
report-
the commissioner’s
ing
to make combined
prospective
only,
give
election
or to
it limited
permit-
retroactive effect. The fact that
were
years
retroactively
ted for some
utilize the combined
reporting technique
nullify
does not
the commissioner’s
discretionary power
year
for the
issue.” 412 Mich
commissioner, any taxpayer
"In the discretion of the
which owns
directly
indirectly
capital
substantially
or controls either
or
all the
corporations,
substantially
capital
stock of 1 or more other
or
all the
directly
indirectly by
stock of which is owned or
controlled either
or
corporations,
or more other
or
interests which own or control
directly
indirectly substantially
capital
either
more
or
all the
stock of 1 or
corporations may
required
permitted
report
to make a
covering any
corporations
setting
a combined basis
such other
* *
may require
forth such information as the commissioner
added.)
(Emphasis
*12
Dep’t
Donovan Co
Opinion op the Court
writing
majority, agreed
Justice
for the
Ryan,
Fitzgerald
with Justice
on this issue:
accurately
"The facts
this case are
stated in Jus-
opinion.
agree
Fitzgerald’s
tice
We
with his view that
discretionary power
the tax commissionerhas broad
permit
require
reporting.” (Emphasis
or
combined
added.)
Group, being unitary busi- required ness, is entitled to and to file its income having basis”, tax returns on a combined department may such, now, admitted not for appeal. time, the first raise the issue on department correctly *13 op Opinion the Court department, According these decisions the to "unitary concept changed so business” of a the longer the Donovan that be said it can no that "unitary Group We business”. is a Construction impact of these find address to no occasion unequivocally department conceded has The cases. enterprise”. "unitary business Donovan was that Where, allega- party’s admission, of a result as a upon by the trial ruled not are tions admitted allegations pre- admitting party such court cluded ap- allegations challenging on such County, supra, Bay peal. Ass’n see also Maxson Federation, v Jewish Welfare Teachers of Hebrew Accord- 54; 233 NW2d ingly, circuit court to remand to the to we decline of Revenue the Commissioner whether determine 335, basis, refuse to § under had a rational tax returns. amended combined Donovan’s IV. Interest Tax Refunds on 12, 1981, judgment or issued November per an the tax refund interest on "9% dered * * * computed 23, 1975, from March to be num com filed their the date the which is conceding plaintiffs are While bined returns”. the Revised under 6013 of entitled to interest Judicature 27A.6013, Act, 600.6013; MCL department awarding court erred the trial contends Income Tax
interest under year 1967, to calendar as amended. Prior Act authority statutory for the 1974, there was no payment In the income tax refunds. of interest on delayed spring with the refunds were by expressed result that considerable criticism Legisla- press.4 response, public and the In entitled, May State Tax Until Fall for Your An article "You Wait Schuster, Refund”, Gary appeared in The Detroit News F. Donovan Co v op Opinion the Court ture amended the statute to allow for payment of interest on tax refunds for the tax years begin- ning on or after January that,
argues since the Legislature made amendment effective for the tax years beginning with it Legislature obvious the did not intend interest paid on refunds for the three tax years prior to 1974.
The department’s
position overlooks
impact
of the recent decision in
supra. In
Clarke-Gravely,
case,
the Supreme Court held that
the tax-
payer was entitled to
income
refunds based on
the filing of amended combined corporate returns
*14
for 1972 and 1973.
return,
As to the 1971
the
Supreme Court remanded to allow the tax commis-
sioner
to exercise his discretion under
335 to
determine whether
a rational basis existed to re-
fuse the return.
If no rational basis was found to
remand,
exist on
the Court held "the refund shall
with interest
paid
be
from the date of the commis-
sioner’s
original
refusal
accept
to
the
added.)
amended return”.
(Emphasis
I read majority believe *15 motion for admission on the General’s Attorney unitary that were summary judgment plaintiffs returns on to file their required business as that admission basis. I read three-factor unified are a conceding prima that facie returns and, such, their as should submit the admis- I read on basis. But don’t a combined negate or so far as to eliminate going sion as 5 by at judgment awarded interest entered the trial court 9% 23, 1975, filed. beginning returns were the date the combined March Dep’t 29 Co Donovan v by Allen, P.J. Dissent commissioner’s broad discretion under 335 to § good refuse to the returns if should cause reject exist the returns. I don’t believe commissioner ever intended to abdicate that statu- tory responsibility. Yet is what precisely must assume in majority order to hold that Court is foreclosed from remanding the issue back to the trial court for a hearing on the merits.
Further,
question
of whether
the commis-
sioner properly exercised his
335 discretion turns
on whether
the Donovan
Group
Construction
was
in fact "a unified business enterprise”. Whether
it
such,
not,
question
is a
of fact. Where
exist,
questions of fact
summary judgment
gen-
Gillis,
Croton v
erally inappropriate.
104;
ment it appears unless it is impossible for the claim to supported evi- trial. Ceplin Bastian-Blessing v dence at Division of Golconda Corp, 90 App 527; Mich 282 NW2d (1979). Therefore, 380 I believe that the trial court erred, though so, understandably in granting sum- mary judgment.
The Ingham Circuit Court
issued
opinion
its
14, 1981,
October
judgment
was entered No-
12,
vember
On February
opinion
Clarke-Gravely Corp Dep’t of
Treasury,
484;
(1982),
NW2d
was issued. The
—
ASARCO, Inc v
Comm,
Idaho
State Tax
—;
US
3103;
S Ct
(1982),
30
by Allen, P.J.
Dissent
discretionary
business,
under
broad
which
by Clarke-Gravely
power
the commissioner
filing
precluded
might
return.
a
be
argument
attorney
appeal, the
on
assistant
At oral
frankly
general
representing
court level
that, had he known at
trial
stated
by reason of
now knows
ASARCO-
much as he
as
stipulated
Woolworth,
have
that
he never would
unitary
plaintiffs
entitled
a
business
were
were
a combined return.
to file
I
that ASARCO and
not convinced
While
am
drastically
change
as
the law as
Woolworth
persuaded
Attorney
contends,
I am
a
General
genuine
as to whether
issue of fact exists
enterprise
whose combined
re-
are
accepted by the
must
commissioner. This
turns
important
to
to the state and
case
too
operated
potentially affected
multistate
remanding
thereby to
without
make
decision
hearing.
evidentiary
an
the trial court for
circumstances,
fundamental
fair-
Under
these
ness and
case law authorize a remand.
current
appellate
only
court
The fact that an
examines
preserved
points
properly
been
at trial
have
power
prevent
not
does
limit the court’s
funda-
injustice.
Radley,
mental
Morris v
(1943).
699;
"In
presented by
view of the
of the issue
whole,
peculiar
this case to the state as a
and the
timing
Thompson
of this case in relation to both
cases
Enz,
[Thompson
App 404;
v
Similarly,
Clarke-Gravely, supra,
after
Supreme Court decided that the commissioner had
discretionary powers
permit
require
broad
reporting,
to decide whether certain
request
met,
criteria have been
and to
additional
making
information
determination,
before
such
Supreme
Court remanded the case to the
Commissioner of Revenue for the exercise of such
powers
upon
discretion. The broad
conferred
this
820.1(7)
Court
GCR
authorize this Court
any
ought
to issue
order which
to have been
or made.
notes
the circuit
court
not
did
consider whether the commissioner
rejecting plaintiffs’
acted within his discretion in
amended combined returns. The circuit court did
department
not consider the issue because the
required
admitted that
were entitled and
to file their
income tax
on a
returns
department
basis. Because the
admitted that
its
policy
require
is to
to file a
combined return and thus failed to raise this issue
precluded
raising
below, it is now
it
appeal.
Bay County,
first time on
See Maxson v
(1939).
86, 89;