Monday, August 30 2010
Long Planned Trip to Southern France and the Rhone Valley a Reality
As you may be reading this blog I will be in route to the Southern Rhone Valley for four days of tasting the best wine in the world, dining on French cuisine and sightseeing. That will be followed with a trip up the French Riveria to Monoco and a night in the Ambassodor Hotel in downtown Monte Carlo. A mediterrian cruise follows.
While I am gone, I will be out of telephone contact. My associate BD Copping has agree to field my calls that are of an emergency nature. He can be reached at 517/243-0708.
I will have access to email and I do have a Skype account for emergencies. Please send any information, questions or requests to me via email at Ed@EdKisscorni.com
When I return on Monday September 13th, there should be a feeling of fall in the air, the Tigers will be in the middle of their run for the division title and the Lions will be undefeated.
Sunday, August 29 2010
Taxpayer Could Not Appeal a Use Tax Assessment Because Petition Was Filed Late
The Court of Appeals is taking a very strict appraoch on the statutory due date for a Tax Tribunal appeal, 35 days from the date of the Final Assessment. In Beech Air, Inc. v. Dept. of Treasury, Michigan Court of Appeals, No. 290520, August 12, 2010 the dismissal of a taxpayer's petition for appeal of a use tax assessment on an aircraft stored in Michigan for repairs was upheld because the taxpayer failed to file the petition within the statutory appeal period. Michigan law requires that a petition of appeal to the Michigan Tax Tribunal be filed within 35 days of the final ruling or determination. The taxpayer failed to support its claim that the period was tolled because of due process concerns, as it could point to no authority that supported the position that it was the Department of Treasury's responsibility to convene an informal conference. Furthermore, the taxpayer could not rely on the allegation that a department representative indicated that a subsequent letter explaining the assessment would arrive, as the representative made no statement that the date of the final assessment could be disregarded.
Saturday, August 28 2010
Foreclosure Case in Court of Claims
In River Investment Group, LLC v. Casab, Michigan Court of Appeals, No. 290645, August 10, 2010, the court of claims had jurisdiction in an action involving a local property tax foreclosure and sale of property, the Michigan Court of Appeals has ruled. The property owner sued the company that purchased the property for unjust enrichment and conversion arising from improvements that the property owner made to the property after the foreclosure, but without notice of the foreclosure. The property owner argued that the court of claims had jurisdiction only in actions against governmental entities. However, the applicable statute specifically stated that the court of claims had jurisdiction in an action to recover monetary damages, and nothing in the statute required an action under that statute to be against a governmental entity.
The property owner also argued that this action was not an action to recover monetary damages under the applicable statute because the statute only allowed actions against an entity charged with providing notice, not a private party such as the company that purchased the property at the foreclosure sale. The applicable statute, however, applied to an action by a party who claimed that he or she did not receive any notice required under the general property tax provisions. In this case, the property owner was an owner of an extinguished or unrecorded interest in property and claimed injury from the fact that it did not receive notice as required under the general property tax provisions.
Monday, August 09 2010
Public Act 133 of 2010 (PA 10-133), effective Augist 2, 2010 has added another exclusion to the definition of gross receipts. Excluded from gross receipts are the entire amounts received for Health Care Management Consulting Services.
The definition of "gross receipts" under the Michigan Business Tax is modified so that amounts received by a health care management consulting services taxpayer as fees from its clients that the taxpayer expends to reimburse those clients for labor and nonlabor services that are paid by the client and reimbursed to the client pursuant to a services agreement are excluded. Previously, such amounts were included in gross receipts and thus subject to the modified gross receipts tax portion of the Michigan business tax.
Friday, August 06 2010
Michigan's Petition for Membership in the Streamlined Sales and Use Tax Agreement and Michigan's Certificate of Compliance were posted to the Michigan Department of Treasury website as of January 31, 2005, and were filed with the Co-Chairs of the Streamlined Sales Tax Implementing States on January 31, 2005.
On July 30, 2010 the State Treasurer submitted Michigan's Re-Certification Letter to the Executive Director of the Streamlined Sales Tax Governing Board. The letter states that Michigan is in substantial compliance with the Streamlined Sales and Use Tax Agreement and that no court opinions or legislative amendments have occurred within the past year to affect Michigan's compliance.
On July 30, 2010 Michigan submitted a revised Taxability Matrix and the revised Certificate of Compliance to the executive director of the Streamlined Sales Tax Governing Board. The certificate and matrix can be viewed on the department's Web site at http://www.michigan.gov/taxes/.
Streamlined Sales and Use Tax Project, Michigan Department of Treasury, July 30, 2010
Thursday, August 05 2010
Assessor Misclassified Property
In Walter Toebe Construction Co. v. Department of Treasury, Michigan Court of Appeals, No. 291764, July 27, 2010, a taxpayer was denied a credit for property taxes paid against the Michigan Single Business Tax (SBT) because the assessor mistakenly classified a portion of property as commercial personal property instead of industrial personal property, as required by the applicable law.
Examining the statutory language for the credit, the appellate court reasoned that the Single Business Tax Act did not import the definition of industrial personal property from the property tax act. As such, the classification of the property was essential to determine whether the taxpayer was entitled to claim the credit. The Department of Treasury could rely on the assessor's classification of property and did not need to make an independent assessment of whether the taxpayer's property met the definition. Accordingly, due to the property's misclassification, the taxpayer was not entitled to the credit.
Wednesday, August 04 2010
In Dalton Enterprises v. Dalton Township, Michigan Court of Appeals, No. 291789, July 22, 2010 a township's special property assessment that was levied against a taxpayer's property to defray the cost of a sanitary sewer improvement project was ruled valid, but the Michigan Tax Tribunal (MTT) should have ordered the township to correct the REU (Residential Equivalency Unit) assessment for the property on the assessment roll and recalculate the special assessment and connection charge because the taxpayer's property was incorrectly classified as retail space rather than as a warehouse. The REU Schedule established a special assessment cost per REU and a connection charge per REU for properties within the special assessment district.
The taxpayer contended that the special assessment should have been invalidated because the sewer improvement project was primarily intended to benefit an amusement park and the township's new industrial park. Further, the taxpayer claimed that the amount of the special assessment was not reasonably proportionate to the benefit to the taxpayer's property because the property already had a water and septic system that met its needs. The taxpayer also argued that the special assessment constituted a tax and, therefore, violated the Headlee Amendment to the Michigan Constitution (Art. 9, §31). In addition, the taxpayer alleged that the township did not follow the statutory and procedural requirements to implement the special assessment.
The Michigan Court of Appeals held that the MTT properly determined that the special assessment was valid because the taxpayer failed to present sufficient evidence to overcome the presumption of validity. Without such evidence, the MTT had no basis to strike down the special assessment. The only evidence submitted by the taxpayer regarding whether the amount of the special assessment was proportionate to the increased value of its property was the property owner's lay opinion testimony that the value of the property was less because of the sewer assessment. However, the property owner's lay opinion was not sufficient to overcome the presumption of proportionality, especially when coupled with the opinion expressed by the township's expert that the property's special assessment was proportional. The township's expert also noted that an enhancement typically resulted from the installation of a public sewer system.
The appellate court also rejected the taxpayer's argument that the special assessment violated the Headlee Amendment, which prohibited a local government unit from levying a tax without voter approval, because the special assessment was not a tax. Rather, a special assessment was a specific levy designed to recover the costs of improvements that confer local and peculiar benefits upon property within a defined area. Likewise, the connection charge in this case was a fee and not a tax because the charge served a regulatory purpose rather than a revenue-raising purpose. The special assessment district was created to fund the sanitary improvement project. Such a project was an exercise of the township's power to regulate the public health, safety, and welfare. The connection fee was also proportionate to the necessary cost of the service.
The taxpayer's statutory argument that the county, not the township, was required to enter into the contract with the general contractor was also rejected. The appellate court noted that the taxpayer cited no authority for its conclusion that the township's special assessment was void if the county did not contract with the general contractor. Even if the contract were successfully challenged, this would not affect the validity of the special assessment district and the special assessment.