Parties Mistakenly Believed the Personal Property Statement was Accurate
In Cherryland Electric Cooperative v. Blair Township, Michigan Court of Appeals, Nos. 296829, 296830, and 296856, May 15, 2012 an electric cooperative was entitled to a local Michigan personal property tax refund because of a mutual mistake of fact. The electric cooperative and the townships' assessors shared and relied on the erroneous belief that a 1984 rural electric cooperatives (REA) personal property reporting form (1984 form) was accurate. That belief was erroneous because contributions in aid of construction (CIAC) should not have been included in the personal property assessments for REA, such as the electric cooperative in this case, based on a 1984 State Tax Commission (STC) bulletin. The erroneous belief of the parties resulted in the electric cooperative's personal property being inaccurately assessed, thereby affecting the substance of the transaction.
The 1984 STC bulletin was issued to assessing officers and county equalization directors and directed the REA to prepare their personal property tax statements using the same procedures as the investor owned utilities (IOU). The 1984 bulletin also indicated that a system economic factor would be based on the cooperatives kilowatt hour sales per mile of line and did not mention CIAC. Following the issuance of the 1984 bulletin, the STC issued the 1984 form, which included CIAC when CIAC was not being reported by IOUs. The mutual mistake of fact was the parties' shared erroneous belief that CIAC was required to be reported and included pursuant to the STC's personal property statements and directives.