Thursday, October 07 2010
Taxpayer Was Denied a Single Business Tax Personal Property Tax Credit Because of a Classification Error Made by the Assessor
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 former SBT 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.