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Contact Information:
Edward S. Kisscorni, CPA
290 Suncrest Court, SW
Grandville, MI 49418

Office: 616/233-0667
Cell: 616/443-6730
Fax: 616/233-0667




Monday, June 28 2010

A Sales Tax Appeal of a Bad Debt Deduction Decision is Denied on June 17, 2010 by the Michigan Supreme Court.  This case grew out of the Daimler Chrysler case (Daimler Chrysler Service of North America, LLC v. Department of Treasury, Michigan Court of Appeals, Jul;y 25, 2006) where the bad debt deduction was allowed only to be omitted on a retro active basis for all other (than Daimler Chrysler) taxpayers including GMAC, LLC and Ford Motor Credit.   

The Michigan Supreme Court has denied the application for leave to appeal a decision of the Michigan Court of Appeals [GMAC LLC v. Department of Treasury, Michigan Court of Appeals, No. 289261, November 19, 2009]  (GMAC)

In GMAC, the Court of Appeals held that finance companies that provided financing for motor vehicle purchases were not entitled to a refund of sales tax pursuant to the bad debt deduction statute. The Court of Appeals concluded that the retroactive amendment to the bad debt deduction statute expressly limited the deduction to an entity that was legally required to remit the tax and that this amendment was intended to reestablish the original legislative intent

Judge Stephen Markham in dissenting stated: I would grant leave to appeal to address the following questions: (1) whether the Due Process Clause of Const 1963, art 1, 17 says anything different concerning the constitutionality of retroactive application of state tax laws than does Article V of the United States Constitution; and (2) whether it is relevant in enacting retroactive tax laws that the Legislature asserting that such laws are "curative," and intended to express the "original intent of the Legislature," is not the Legislature that enacted the laws in question but a subsequent Legislature. I would direct that this case be argued and submitted together with Ford v Dep't of Treasury, No. 140624.

There may ultimately be an appeal to the United States Supreme Court on the issue of legislative retroactive amendments designed to overturn judicial decisions.

Posted by: Ed Kisscorni AT 02:37 pm   |  Permalink   |  0 Comments  |  Email

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