Sagar Trust v. Department of Treasury

• Decision Date: 08 March 1994
• Docket Number: Docket No. 146832
• Parties: LINDSAY ANDERSON SAGAR TRUST, Plaintiff-Appellant, v. DEPARTMENT OF TREASURY, Defendant-Appellee.
• Court: Court of Appeal of Michigan — District of US

Page 514

514 N.W.2d 514

204 Mich.App. 128

LINDSAY ANDERSON SAGAR TRUST, Plaintiff-Appellant, v. DEPARTMENT OF TREASURY, Defendant-Appellee.

Docket No. 146832.

Court of Appeals of Michigan.

Submitted Feb. 8, 1994, at Lansing.

Decided March 8, 1994, at 9:10 a.m.

Released for Publication April 27, 1994.

Raymond & Dillon, P.C. by Thomas J. Kenny and Mark A. Aiello, Southfield, for plaintiff.

Frank J. Kelley, Atty. Gen., Thomas L. Casey, Sol. Gen., and Russell E. Prins and

Ross H. Bishop, Asst. Attys. Gen., for defendant.

Before RICHARD ALLEN GRIFFIN, P.J., and MARK J. CAVANAGH and KOSELKA, ^* JJ.

PER CURIAM.

Plaintiff appeals by leave granted from an order of the Court of Claims granting summary disposition in favor of defendant pursuant to MCR 2.116(C)(10). We reverse.

The issue presented in this case is when does interest on a tax refund begin to accrue pursuant to M.C.L. § 205.30; M.S.A. § 7.657(30).

On May 18, 1989, Chemical Bank of New York, the trustee for plaintiff Lindsay Anderson Sagar Trust, wrote a letter to defendant Michigan Department of Treasury requesting a refund of $156,961, which the trustee claimed had been erroneously paid. In December 1990, the department agreed to refund the $156,961, stating that interest would begin to accrue forty-five days after November 14, 1990, the date on which the trustee eventually provided the information requested by defendant for determining the validity of the claim.

Plaintiff brought suit in the Court of Claims to recover interest accruing from July 2, 1989, forty-five days after its original letter, through December 20, 1990, the date on which the refund was issued. The Court of Claims granted defendant's motion for summary disposition and dismissed the case. This appeal followed.

The primary objective of statutory interpretation is to determine and give effect to the intent of the Legislature. Great Lakes Sales, Inc. v. State Tax Comm, 194 Mich.App. 271, 275, 486 N.W.2d 367 (1992). Where the language of a statute is clear, there is no need for interpretation; the statute must be applied as written. Farrington v. Total Petroleum, Inc, 442 Mich. 201, 208, 501 N.W.2d 76 (1993). Courts may not speculate about the probable intent of the Legislature beyond the words employed in the statute. Nat'l Exposition Co. v. Detroit, 169 Mich.App. 25, 29, 425 N.W.2d 497 (1988). The scope of tax laws generally will not be extended by implication or forced construction. When there is doubt, tax statutes are to be construed most strongly against the government. F.M. Sibley Lumber Co. v. Dep't of Revenue, 311 Mich. 654, 660, 19 N.W.2d 132 (1945); Comerica Bank-Detroit v. Dep't. of Treasury, 194 Mich.App. 77, 92, 486 N.W.2d 338 (1992). The principle that a longstanding interpretation of a statute by the agency that administers it is entitled to great weight does not control when the interpretation is clearly wrong. Murphy v. Michigan, 418 Mich. 341, 348, 343 N.W.2d 177 (1984).

The relevant statute is M.C.L. § 205.30; M.S.A. § 7.657(30), which provides in part as follows:

(1) The department shall credit or refund all overpayment of taxes, all taxes, penalties, and interest erroneously assessed and collected, and all taxes, penalties, and interest that are found unjustly assessed, excessive in amount, or wrongfully collected with interest at the rate of 3/4 of 1% per month.

(2) A taxpayer who paid a tax claimed not to be due may petition the department for refund of the amount paid.... If a tax return reflects an overpayment or credits in excess of the tax, 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 ... and the excess, if any, shall be refunded to the taxpayer....

(3) A refund shall be certified 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 at the rate of 3/4 of 1% per month 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.... [Emphasis added.]

The department's Revenue Administrative Bulletin 89-36 provides in part as follows:

Credit or Refund Interest

Rate and Commencing Date of Interest. Pursuant to the Michigan Revenue Department Act, MCL 205.30(2) [M.S.A. § 7.657(30)(2) ], the Department will add interest on overpayments of taxes, penalties, interest and credits in excess of the tax due, at the rate of 3/4 of 1 percent per month. Interest begins the later of 45 days after the claim for a refund is filed, or 45 days after the date established by law for the filing of the return.... Period Suspended for Calculating Interest for Invalid Return. A claim for a refund will be denied if the return does not...