William Mueller & Sons, Inc v. Department of TreasuryWilliam Mueller & Sons, Inc v. Department of Treasury
Rеspondent assessed charges on an unpaid use tax of $9,342.62 and interest for the period of April 1, 1981, through December 31, 1984, on petitioner’s purchase of fertilizer equipment. Petitioner claimed that the purchases at issue are exempt under MCL 205.94(f); MSA 7.555(4)(f) as property involved in agricultural processing. On July 14, 1988, a hearing officer entered a proposed order determining that the equipment at issue was not exempt from the use tax. On August 16, 1989, the Tax Tribunal adopted the hearing officer’s findings of fact but vacated his conclusions of law, holding that petitioner was entitled to a tax exemption under MCL 205.94(f); MSA 7.555(4)(f). Respondent appeals as of right. We affirm.
Petitioner is in the business of testing farm sоil, recommending fertilizer mixes, and selling seed and fertilizer to farmers. Petitioner operates a number of elevators at which it purchases produce from farmers. In its business, petitioner purchases and uses fertilizer-aрplication equipment. Petitioner uses this equipment for a contractual service to farmers for the application of fertilizer and for rental to farmers who apply fertilizer purchased from other sourсes. Petitioner also lends the equipment free of charge to farmers who purchase fertilizer from petitioner.
MCL 205.94(f); MSA 7.555(4)(f) provides in pertinent part:
Property sold to a person engaged in a business enterprise and using and consuming the property in the tilling, рlanting, caring for, or harvesting of the things of the soil or in the breeding, raising, or caring for livestock, poultry, or horticultural products, including transfers of livestock, poultry, or horticultural products for further growth. In that case, at the time of the transfer of the tangible personal property, the transferee shall sign a statement, in a form approved by the department, stating that the property is to be used or consumed in connection with the produсtion of horticultural or agricultural products as a business enterprise. The statement shall be acceрted by the courts as prima facie evidence of the exemption. . . . This exemption does not include transfers of food, fuel, clothing, or similar tangible personal property for personal living or human consumption. This exеmption shall not include tangible personal property permanently affixed and becoming a structural part of real estate.
We hold that § 4(f) applies to the present case. The primary goal of judicial interpretation of statutes is to ascertain and give effect to the intent of the Legislature.
Joy Management Co v Detroit,
Section 4(f), by its plain language, exempts property sold to a business enterprise if the property is used for agricultural or horticultural growth. In the present case, it is not disputed that petitioner is a business enterprise and thаt the fertilizing equipment is used in the tilling, planting, caring for, or harvesting of things of the soil. Therefore, we hold that petitioner is entitled to an exemption under § 4(f).
We are unpersuaded by respondent’s argument that the taxpayer must be in the business of producing agricultural products in order for § 4(f) to apply. Section 4(f) does not state this requirement. Had the Legislature intended this subsection to apply only to farmers, it would have expressly said so. This is evidenced by the fact that the Legislature specifically set forth this limitation under another exemption to the use tax. Under § 4(g), a taxpayer is not exempt if he only performs an industrial processing service and is not an industrial procеssor. By failing to include similar language in § 4(f), the Legislature evidenced its intent to provide broader coverage under § 4(f).
Respondent’s reliance on the second sentence of the statute—"the property is to be used or consumed in connection with the production of horticultural or agricultural products as a business entеrprise”—is misplaced. This language does not require that a taxpayer be in the business of
In sum, we hold that the exemption contained in § 4(f) does not require that the taxpayer be engаged in the actual production of horticultural or agricultural products.
Respondent also alleges that the Tax Tribunal erred in holding that petitioner is entitled to an exemption under the use tax because it was an "agriculturist” as defined in 1979 AC, R 205.51. Because we have concluded that there is no requirement that petitioner be in the business of producing horticultural or agricultural products, this administrative rule cannot impose this requirement through the use of the term "agriculturist.” An administrative rule cannot exceed the statutory authority granted by the Legislature.
Michigan Sportservice, Inc v Comm’r of Dep’t of
Revenue,
Affirmed.