GUARDIAN INDUS. v. TREASURY DEPT.

• Decision Date: 10 January 2001
• Docket Number: Docket No. 211042.
• Citation: 621 N.W.2d 450,243 Mich. App. 244
• Parties: GUARDIAN INDUSTRIES CORPORATION, Plaintiff-Appellant, v. DEPARTMENT OF TREASURY, Defendant-Appellee.
• Court: Court of Appeal of Michigan — District of US

621 N.W.2d 450

243 Mich. App. 244

GUARDIAN INDUSTRIES CORPORATION, Plaintiff-Appellant, v. DEPARTMENT OF TREASURY, Defendant-Appellee.

Docket No. 211042.

Court of Appeals of Michigan.

Submitted September 7, 2000, at Lansing.

Decided November 14, 2000, at 9:00 a.m.

Released for Publication January 10, 2001.

Howard & Howard Attorneys, P.C. (by Michele L. Halloran and Donna M. Donovan), Lansing, for the plaintiff.

Jennifer M. Granholm, Attorney General, Thomas L. Casey, Solicitor General, and Glenn R. White, Assistant Attorney General, for the defendant.

Before TALBOT, P.J., and HOOD and GAGE, JJ.

PER CURIAM.

Plaintiff Guardian Industries Corporation appeals as of right from an order granting summary disposition in favor of defendant Department of Treasury. We affirm.

On August 29, 1989, plaintiff purchased a Gulfstream IV Model GIV jet aircraft (hereinafter the aircraft) from Gulfstream Aerospace Corporation. The price of the aircraft was $19 million. On August 31, 1989, the aircraft was delivered to plaintiff in the state of Delaware, where plaintiff took possession and performed an inspection. That same day, plaintiff registered the aircraft with the Federal Aviation Administration, Department of Transportation (FAA). Plaintiff alleged that before August 31, 1989, and on occasions thereafter, it attempted to formally register the aircraft in Delaware, but was advised that there was no state registration requirement for an aircraft registered with the FAA. The "first use" of the aircraft consisted of a flight originating in Georgetown, Delaware, and concluding in Georgia on August 31, 1989. Between September 3, 1989, and September 10, 1989, the aircraft traveled to Ohio, Georgia, and seven European cities. On December 9, 1989, the aircraft landed in Michigan for the first time, more than ninety days after the date of purchase. After the aircraft arrived in the state of Michigan, it was hangared or stored at Detroit Metropolitan Airport and flown out of Detroit, Ypsilanti, Gaylord, and Traverse City.

Although the aircraft did not enter the state of Michigan during the first ninety days after the date of purchase, plaintiff paid use tax, under protest, in the amount of $760,000, about January 16, 1990. About February 21, 1990, plaintiff filed a petition and claim of refund for the amount of taxes paid. Defendant denied the petition. Other than the payment of the use tax to the state of Michigan, plaintiff did not pay taxes on the purchase of the aircraft in any other state. Plaintiff filed a five-count amended complaint in the Court of Claims, seeking to recover the payment of the use tax.¹ Specifically, plaintiff alleged (1) the aircraft was not subject to tax, by statute, because of its arrival in Michigan more than ninety days after purchase, (2) administrative rules interpreting the tax code provided that the aircraft was exempt from taxation because it was properly registered in the state of purchase, Delaware, (3) the property was neither used, stored, nor consumed in the state of Michigan and not subject to the state use tax, (4) the taxation violated the Commerce Clause, U.S. Const., art. I, § 8, cl. 3, and there must be an identifiable moment upon initial entry into the state to justify the tax, and (5) no rational basis existed for a system of taxation that grants favorable status to certain classes and withholds the favorable status from plaintiff. The Court of Claims denied plaintiff's motion for summary disposition and granted summary disposition in favor of defendant.²

Plaintiff first argues that because the aircraft was not brought into the state within ninety days of the date of purchase, it was exempt from taxation, and the Court of Claims erred in concluding otherwise. We disagree. Our review of a decision regarding a motion for summary disposition is de novo. Spiek v. Dep't of Transportation, 456 Mich. 331, 337, 572 N.W.2d 201 (1998). At the time of the purchase of the aircraft, subsection 3(1) of the Use Tax Act (UTA), M.C.L. § 205.93(1); MSA 7.555(3)(1), provided:

There is levied upon and there shall be collected from every person in this state a specific tax for the privilege of using, storing, or consuming tangible personal property in this state, which tax shall be equal to 4% of the price of the property, or services specified in section 3a, and to the tax there shall be added penalties and interest where applicable as provided in this act. For the purpose of the proper administration of this act and to prevent the evasion of the tax, it shall be presumed that tangible personal property purchased shall be subject to the tax if brought into the state within 90 days of the purchase date and shall be considered as acquired for storage, use, or other consumption in this state. [Emphasis added.]

Issues of statutory construction present questions of law and also receive review de novo. Oakland Co. Bd. of Co. Rd. Comm'rs v. Michigan Property & Casualty Guaranty Ass'n, 456 Mich. 590, 610, 575 N.W.2d 751 (1998). The primary goal of statutory interpretation is to give effect to the intent of the Legislature. In re MCI Telecommunications Complaint, 460 Mich. 396, 411, 596 N.W.2d 164 (1999). This determination is accomplished by reviewing the plain language of the statute itself. Id. If the statutory language is unambiguous, it is presumed that the Legislature intended the clearly expressed meaning, and judicial construction is neither required nor permitted. DiBenedetto v. West Shore Hosp., 461 Mich. 394, 402, 605 N.W.2d 300 (2000). If the statutory language is ambiguous, only then may we look outside the statute to ascertain the Legislature's intent. Id.

The use tax complements the sales tax and was designed to govern those transactions not covered by the General Sales Tax Act.³WPGP1, Inc. v. Dep't of Treasury, 240 Mich.App. 414, 416, 612 N.W.2d 432 (2000). The UTA, M.C.L. § 205.91 et seq.; MSA 7.555(1) et seq., applies to every person in this state "for the privilege of using, storing, or consuming tangible personal property in this state...." M.C.L. § 205.93(1); MSA 7.555(3)(1). Tax exemptions are disfavored, and the burden of proving an entitlement to an exemption is on the party claiming the right to the exemption. Elias Bros. Restaurants, Inc. v. Treasury Dep't, 452 Mich. 144, 150, 549 N.W.2d 837 (1996). Tax exemptions are strictly construed against the taxpayer because they represent the "antithesis of tax equality...." Id. Indeed, these rules were adopted in Detroit v. Detroit Commercial College, 322 Mich. 142, 148-149, 33 N.W.2d 737 (1948), when the Supreme Court, quoting 2 Cooley, Taxation (4th ed.), § 672, p. 1403, set forth the rules and underlying rationale of the statutory construction of tax exemptions:

"An intention on the part of the legislature to grant an exemption from the taxing power of the State will never be implied from language which will admit of any other reasonable construction. Such an intention must be expressed in clear and unmistakable terms, or must appear by necessary implication from the language used, for it is a well-settled principle that, when a specific privilege or exemption is claimed under a statute, charter or act of incorporation, it is to be construed strictly against the property owner and in favor of the public. This principle applies with peculiar force to a claim of exemption from taxation. Exemptions are never presumed, the burden is on a claimant to establish clearly his right to exemption, and an alleged grant of exemption will be strictly construed and cannot be made out by inference or implication but must be beyond reasonable doubt. In other words, since taxation is the rule, and exemption the exception, the intention to make an exemption ought to be expressed in clear and unambiguous terms; it cannot be taken to have been intended when the language of the statute on which it depends is doubtful or uncertain; and the burden of establishing it is upon him who claims it. Moreover, if an exemption is found to exist, it must not be enlarged by construction, since the reasonable presumption is that the State has granted in express terms all it intended to grant at all, and that unless the privilege is limited to the very terms of the statute the favor would be extended beyond what was meant."

In the statute at issue, there is no language establishing an exemption from taxation. Rather, the statute merely provides that tangible personal property is presumed to be subject to the tax if brought into the state within ninety days of the purchase date. A presumption is merely a rule of procedure designed to supply "`the want of facts.'" Cichecki v. Hamtramck, 382 Mich. 428, 436, 170 N.W.2d 58 (1969), quoting Gibson v. Dymon, 281 Mich. 137, 140, 274 N.W. 739 (1937). The only effect of a presumption is to cast onto the opposite party the burden of going forward with proofs. Id. Accordingly, the language at issue merely provided that tangible personal property brought into the state within ninety days of purchase was presumed to be acquired for storage, use, or other consumption in this state. A plaintiff, in such case, has the burden of going forward with proofs to demonstrate that property purchased during this specified period was not acquired for use in this state. However, in the present case, it is undisputed that the plaintiff did not bring the aircraft into this state during the ninety-day period, but, rather, after the ninety-day period had expired. Presumptions are merely prima facie precepts or inferences from the existence or nonexistence of facts and disappear if, and when, evidence is introduced from which facts may be found. In re Estate of Miller, 300 Mich. 703, 711, 2 N.W.2d 888 (1942); Michigan Aero Club v. Shelley, 283 Mich. 401, 410, 278 N.W. 121 (1938). Accordingly, the presumption is not applicable to the facts of this case, it having dissolved after the expiration of the ninety-day period.

Plaintiff contends that...