Ford Motor Co. v. Dep't of Treasury

• Decision Date: 26 June 2014
• Docket Number: Calendar No. 1.,Docket No. 146962.
• Citation: 852 N.W.2d 786,496 Mich. 382
• Parties: FORD MOTOR COMPANY v. DEPARTMENT of TREASURY.
• Court: Michigan Supreme Court

496 Mich. 382

852 N.W.2d 786

FORD MOTOR COMPANY

v.DEPARTMENT of TREASURY.

Docket No. 146962.

Calendar No. 1.

Supreme Court of Michigan.

Argued April 2, 2014.

Decided June 26, 2014.

Miller, Canfield, Paddock and Stone, PLC (by Loren M. Opper, Clifford W. Taylor, and Paul D. Hudson), for plaintiff.

Bill Schuette, Attorney General, Aaron D. Lindstrom, Solicitor General, and Matthew B. Hodges, Assistant Attorney General, for defendant.

Evan H. Kaploe for amicus curiae the State Bar of Michigan, Taxation Section.

MICHAEL F. CAVANAGH, J.

In this case, we must determine what actions a taxpayer must take under MCL 205.30 of the Revenue Act to trigger the accrual of interest on a tax refund. We hold that in order to trigger the accrual of interest, the plain language of the statute requires a taxpayer to (1) pay the disputed tax, (2) make a “claim” or “petition” for a refund, and (3) “file” the claim or petition. Although a “claim” or “petition” need not take any specific form, it must clearly demand, request, or assert a right to a refund of tax payments made to the Department of Treasury that the taxpayer asserts are not due. Additionally, in order to “file” the claim or petition, a taxpayer must submit the claim to the Treasury in a manner sufficient to provide the Treasury with adequate notice of the taxpayer's claim.

I. FACTS AND PROCEDURAL HISTORY

This case began as a dispute between the parties regarding whether plaintiff owed tax under the now repealed Single Business Tax Act (SBTA) related to plaintiff's contributions to its Voluntary Employees' Beneficiary Association (VEBA) trust fund for 1997 through 2001.

On August 3, 2005, the Treasury sent an Audit Determination Letter informing plaintiff that the Treasury had determined that the VEBA contributions were taxable under the SBTA and, on the same day, plaintiff returned the letter to the Treasury after checking the box on the letter indicating that plaintiff “disagrees with this determination.” ¹ The Audit DeterminationLetter incorporated the Audit Report of Findings prepared by the Treasury, which acknowledged that plaintiff “disagrees with the audit determination” and “want[s] to request a hearing on the contested issue.” During the audit process, plaintiff provided the Treasury with detailed summaries of the amount of disputed tax for each tax year.

On November 17, 2005, plaintiff requested an informal conference with the Treasury regarding the determination that the VEBA contributions were taxable, among other issues. On August 25, 2006, plaintiff sent a letter to the Treasury withdrawing plaintiff's request for an informal conference, informing the Treasury that plaintiff intended to file a complaint in the Court of Claims, and requesting that the Treasury verify that the disputed tax liability was satisfied with unassigned funds that plaintiff had on deposit with the Treasury. Plaintiff's August 25, 2006 letter stated that application of plaintiff's funds on deposit with the Treasury should be viewed as a payment “under protest” under MCL 205.22. On September 15, 2006, the Treasury sent plaintiff a Final Audit Determination letter assessing plaintiff a tax liability approximately $20 million greater than the single business tax plaintiff previously paid. The Treasury also stated that plaintiff owed approximately $2 million in tax deficiency interest. On September 19, 2006, plaintiff informed the informal conference division that it was withdrawing its request.

On December 13, 2006, plaintiff filed a complaint in the Court of Claims asserting that the VEBA contributions were not taxable under the SBTA. That court rejected plaintiff's claim and granted summary disposition to the Treasury. Plaintiff appealed and the Court of Appeals reversed, holding that the VEBA contributions were not taxable under the SBTA. Ford Motor Co. v. Dep't of Treasury, 288 Mich.App. 491, 794 N.W.2d 357 (2010), lv. den. 488 Mich. 1026, 792 N.W.2d 332 (2011).

On August 29, 2011, plaintiff filed a motion in the Court of Claims to enforce the Court of Appeals' judgment. Before the motion was decided, the Treasury calculated that it owed plaintiff $15 million rather than the $17 million that plaintiff claimed was due and, on September 19, 2011, the Treasury remitted $15 million to plaintiff. The approximate $2 million difference resulted in part from the parties' disagreement regarding the date that plaintiff filed its claim for a refund, thus triggering interest accumulation on the refund under MCL 205.30.

At a hearing, the parties agreed that overpayment interest began accruing 45 days after the date that plaintiff provided the Treasury with adequate notice of a claim for refund of tax overpayment. Regarding the difference between plaintiff's claim that it was entitled to a $17 million refund rather than the $15 million refund that the Treasury provided, plaintiff argued that September 17, 2005, was the correct date to calculate the amount of overpayment interest because it was 45 days after plaintiff responded to the Treasury's August 3, 2005 Audit Determination Letter, which plaintiff argued constituted adequate notice of a claim of refund. The Treasury argued that plaintiff did not provide adequate notice until December 13, 2006, when plaintiff filed its initial complaint in the Court of Claims and, therefore, the correct date for calculating the overpayment interest was 45 days after December 13, 2006.

The Court of Claims held in plaintiff's favor, ordered the Treasury to pay additional overpayment interest, and directed the Treasury to pay costs and attorney fees to plaintiff. The Treasury appealed, and after reconsideration, the Court of Appeals reversed the trial court on the calculation of overpayment interest, vacated the award of attorney fees, and remanded to the trial court for further consideration of the attorney fees. Ford Motor Co v. Dep't of Treasury, unpublished opinion per curiam of the Court of Appeals, issued February 26, 2013 (Docket No. 306820), 2013 WL 968115. We granted leave to appeal, asking the parties to address issues related to the calculation of interest on the refund. Ford Motor Co. v. Dep't of Treasury, 495 Mich. 861, 836 N.W.2d 689 (2013).

II. STANDARD OF REVIEW AND RULES OF STATUTORY INTERPRETATION

This case requires interpretation of the Revenue Act. Questions of statutory interpretation are reviewed de novo. Malpass v. Dep't of Treasury, 494 Mich. 237, 245, 833 N.W.2d 272 (2013). A trial court's factual findings are reviewed for clear error. Detroit v. Ambassador Bridge Co., 481 Mich. 29, 35, 748 N.W.2d 221 (2008). A factual finding is clearly erroneous “only when the reviewing court is left with the definite and firm conviction that a mistake has been made.” Id. (citation omitted).

When interpreting statutes, “our primary task ... is to discern and give effect to the intent of the Legislature.” Sun Valley Foods Co. v. Ward, 460 Mich. 230, 236, 596 N.W.2d 119 (1999) (citations omitted). To accomplish that task, we begin by examining the language of the statute itself. Id. (citation omitted). “If the language of the statute is unambiguous, the Legislature must have intended the meaning clearly expressed, and the statute must be enforced as written.” Id. (citation omitted).

III. ANALYSIS

Prior proceedings established that the Treasury erroneously assessed tax on plaintiff's contributions to its VEBA trust fund; thus, the only issue we consider today is the actions a taxpayer must take to trigger the accumulation of interest on a refund. The Revenue Act, MCL 205.1 et seq., governs refunds of erroneously assessed taxes. Specifically, MCL 205.30 provides:

(1) The department shall credit or refund ... taxes ... erroneously assessed and collected ... with interest....

(2) A taxpayer who paid a tax that the taxpayer claims is not due may petition the department for refund of the amount paid within the time period specified as the statute of limitations in [MCL 205.27a]. If a tax return reflects an overpayment ... the declaration of that fact on the return constitutes a claim for refund. If the department agrees the claim is valid, the amount of overpayment, penalties, and interest shall be first applied to any known liability as provided in [MCL 205.30a] and the excess, if any, shall be refunded to the taxpayer or credited, at the taxpayer's request, against any current or subsequent tax liability....

(3) The department shall certify a refund to the state disbursing authority who shall pay the amount out of the proceeds of the tax in accordance with the accounting laws of the state. Interest ... shall be added to the refund commencing 45 days after the claim is filed or 45 days after the date established by law for the filing of the return, whichever is later. Interest on refunds intercepted and applied as provided in [MCL 205.30a] shall cease as of the date of interception.... [Emphasis added.] ²

Thus, the statutory language establishes that, before interest begins accumulating on a tax refund, a taxpayer must: (1) pay the disputed tax; (2) make a “claim” or “petition;” and (3) “file” the claim or petition.

A. A TAXPAYER MUST PAY THE DISPUTED TAX

The statutory language provides that the Treasury must credit or refund taxes “erroneously ... collected.” MCL 205.30(1) (emphasis added). Additionally, MCL 205.30(2) establishes what a taxpayer “who paid a tax ” must do to obtain a refund “of the amount paid.” Emphasis added. Therefore, the statute makes clear what is already obvious: in order to seek a tax refund, a taxpayer must first pay the tax at issue.

B. A TAXPAYER MUST “PETITION” FOR OR “CLAIM” A REFUND

If the taxpayer paid the tax, MCL 205.30(2) provides that a taxpayer may make a “petition” or “claim” for refund. The Revenue Act does not define “petition” or “claim” as used in MCL 205.30. Therefore, we presume that the Legislature intended for the words to have their ordinary meaning. MCL 8.3a. To assist in determining the ordinary...