Supreme Court to Decide Whether Fuel for Tug-Barge Units is Exempt and Whether Use Tax Can be Applied on Purchases Subject to Sales Tax
The Michigan Supreme Court has granted motions for immediate consideration and to stay the precedential effect of Andrie, Inc. v. Department of Treasury, Michigan Court of Appeals, 296 Mich. App. 355.
The Court of Appeals held that a Michigan company engaged in marine transportation and marine construction was not entitled to a use tax exemption for fuel and supplies for vessels engaged in interstate commerce for its tugs, as the tugs were not vessels of 500 tons or more used in interstate commerce. Each tug-barge unit did not qualify as a single vessel for purposes of the exemption, and each tug had a registered tonnage of under 500 tons. The Supreme will be asked to determine whether the exemption in MCL 205.94(1) applies in this case.
The second issue, which has broad application, is: (1) whether the Court of Appeals correctly determined that a retail transaction in Michigan subject to the sales tax is not subject to the use tax; and (2) whether a retail purchaser is entitled to a presumption that sales tax is paid on retail transactions in Michigan.
Andrie, Inc. v. Department of Treasury,, Michigan Court of Appeals, 296 Mich. App. 355 (2012); leave to appeal granted, Mich. S. Ct., Dkt. No. 145557, December 5, 2012