Clark Equipment Co. v. State, Dept. of Treasury, Revenue Division

• Decision Date: 24 June 1975
• Docket Number: No. 16,16
• Citation: 394 Mich. 396,230 N.W.2d 548
• Parties: CLARK EQUIPMENT COMPANY, a Delaware Corporation, Plaintiff-Appellee, v. STATE of Michigan, DEPARTMENT OF TREASURY, REVENUE DIVISION, Defendant-Appellant.
• Court: Michigan Supreme Court

Page 548

230 N.W.2d 548

394 Mich. 396

CLARK EQUIPMENT COMPANY, a Delaware Corporation, Plaintiff-Appellee, v. STATE of Michigan, DEPARTMENT OF TREASURY, REVENUE DIVISION, Defendant-Appellant.

No. 16.

Supreme Court of Michigan.

June 24, 1975.

Dickinson, Wright, McKean & Cudlip, Lansing by T. Donald Wade, Ernest Getz, Detroit, Benjamin O. Schwendener, Jr., Lansing, for plaintiff-appellee.

Frank J. Kelley, Atty. Gen., Robert A. Derengoski, Sol. Gen., Richard R. Roesch, Charles E. Liken, Asst. Attys. Gen., Lansing, for defendant-appellant.

Before the Entire Bench except SWAINSON and LINDEMER, JJ.

LEVIN, Justice.

The circuit court entered summary judgment in favor of the plaintiff quashing a subpoena issued in August, 1971 by the defendant seeking books and records for the purpose of redetermining corporation franchise fees for the years 1966 and 1967.

The plaintiff's annual reports for those years were timely filed. The fee, as computed by the Franchise Fee Division, Department of Treasury, was in each instance in excess of the fee computed by the corporation in its report. The deficiencies were paid. The 1966 report was accepted November 9, 1966 and the 1967 report was accepted January 23, 1968.

In Borden, Inc. v. Department of Treasury, 391 Mich. 495, 218 N.W.2d 667 (1974), an equally divided Court affirmed an opinion of the Court of Appeals (43 Mich.App. 106, 204 N.W.2d 34 (1972)) which had held that the Department of Treasury is without power to recompute the franchise fee of a corporation after the annual report and franchise fee have been accepted.

For the reasons set forth in the Borden opinion for affirmance (391 Mich. pp. 500--510, 218 N.W.2d pp. 668--674), we affirm the judgment of the circuit court quashing the subpoena.*

Affirmed.

T. G. KAVANAGH, C.J., and COLEMAN and FITZGERALD, JJ., concur.

WILLIAMS, Justice (dissenting).

For the reasons set forth in Borden, Inc. v. Department of Treasury, 391 Mich. 495, 218 N.W.2d 667 (1974), opinion for reversal, I respectfully dissent.

The decision of the Court today allows corporate taxpayers who otherwise would be liable for adjustments in their franchise fee tax to successfully avoid further liability once the Department of the Treasury has accepted the taxpayer's annual report under § 84 of the General Corporation Act. ¹ Such a result is not in keeping with the requirements of the General Corporation Act ² and the fees, taxes and charges act ³ nor is it consistent with the principle that all this State's taxpayers contribute their fair share to the State's Treasury.

The decision of the lower court should be reversed.

* 1975 P.A. 13, approved March 25, 1975 with immediate effect, authorizes audit of a corporation by the Department of Treasury and assessment of a deficiency and provides periods of limitation.

1 M.C.L.A. § 450.84; M.S.A. § 21.84.

2 M.C.L.A. § 450.1 et seq.; M.S.A. § 21.1 et seq.

3 M.C.L.A. § 450.301 et seq.; M.S.A. § 21.201 et seq.