Tax Tribunal Determination of Unjust Enrichment Reversed
In MJR Group, LLC v. Department of Treasury, Michigan Court of Appeals, No. 312745, February 25, 2014 the summary judgment of the Tax Tribunal in favor of the Department of Treasury was reversed. The Court of Appeals said the Tax Tribunal applied the wrong standards upon reviewing the parties’ motions.
The taxpayer sought a refund on sales tax erroneously remitted for bottled water and prepackaged candy sold at its theaters’ concession stands. The taxpayer asserted that it did not pass the burden of the sales tax to its customers but absorbed the amount, and advertised that its prices included sales tax.
The Tax Tribunal ruled that the taxpayer would be unjustly enriched if it received a refund, but in doing so, rejected the taxpayer’s well-pleaded allegations that it did not add sales tax to its menu items and did not reimburse itself. As the taxpayer created the factual issue of whether it collected sales tax from its customers, summary disposition could also not be granted in its favor.