Fuel Used in Final Testing and Quality Control Exempt from the Motor Fuel Tax
In General Motors Corp. v. Department of Treasury, Michigan Court of Appeals, No. 303822, April 19, 2012, an automotive company was entitled to a Michigan motor fuel tax refund because it qualified as an end user of motor fuel for non-highway purposes. The fuel was placed in the tanks of newly manufactured vehicles at the end of the assembly process. Some of this fuel was used to power the vehicles as they went through final testing and quality control, and some fuel remained in the tanks after the vehicles were transferred to a carrier for shipment out of state. The amount of fuel used in each vehicle was calculated to be the minimum amount necessary to start the vehicle during the loading and transit process.
Moreover, even though not all fuel was actually burned during the process, the term "use" within the meaning of the applicable statute could mean that the fuel was employed for some purpose or could be applied to one's own purposes, as well as to consume, expend, or exhaust. Therefore, a taxpayer would qualify as an end user even when incidental amounts of fuel remained in the vehicles when they were shipped.