William Mueller & Sons, Inc. v. Department of Treasury

• Decision Date: 03 June 1991
• Docket Number: Docket No. 120500
• Citation: 473 N.W.2d 783,189 Mich.App. 570
• Parties: WILLIAM MUELLER & SONS, INC., Petitioner-Appellee, v. DEPARTMENT OF TREASURY, Respondent-Appellant. 189 Mich.App. 570, 473 N.W.2d 783
• Court: Court of Appeal of Michigan — District of US

Page 783

473 N.W.2d 783

WILLIAM MUELLER & SONS, INC., Petitioner-Appellee, v. DEPARTMENT OF TREASURY, Respondent-Appellant.

Docket No. 120500.

189 Mich.App. 570, 473 N.W.2d 783

Court of Appeals of Michigan.

Submitted Feb. 12, 1991, at Lansing.

Decided June 3, 1991, at 9:10 a.m.

Released for Publication Sept. 19, 1991.

[189 MICHAPP 570] Lambert, Leser, Dahm, Cook & Schmidt, P.C. by [189 MICHAPP 571] Susan M. Cook and David L. Powers, Bay City, for William Mueller & Sons, Inc.

Frank J. Kelley, Atty. Gen., Gay Secor Hardy, Sol. Gen., and Richard R. Roesch and Ross H. Bishop, Asst. Attys. Gen., for Department of Treasury.

Before McDONALD, P.J., and BRENNAN and JANSEN, JJ.

JANSEN, Judge.

Respondent assessed charges on an unpaid use tax of $9,342.62 and interest for the period of April 1, 1981, through December 31, 1984, on petitioner's purchase of fertilizer equipment. Petitioner claimed that the purchases at issue are exempt under M.C.L. Sec. 205.94(f); M.S.A. Sec. 7.555(4f) as property involved in agricultural processing. On July 14, 1988, a hearing officer entered a proposed order determining that the equipment at issue was not exempt from the use tax. On August 16, 1989, the Tax Tribunal adopted the hearing officer's findings of fact but vacated his conclusions of law, holding that petitioner was entitled to a tax exemption under M.C.L. Sec. 205.94(f); M.S.A. Sec. 7.555(4f). Respondent appeals as of right. We affirm.

Petitioner is in the business of testing farm soil, recommending fertilizer mixes, and selling seed and fertilizer to farmers. Petitioner operates a number of elevators at which it purchases produce from farmers. In its business, petitioner purchases and uses fertilizer-application equipment. Petitioner uses this equipment for a contractual service to farmers for the application of fertilizer and for rental to farmers who apply fertilizer purchased from other sources. Petitioner also lends the equipment free of charge to farmers who purchase fertilizer from petitioner.

[189 MICHAPP 572] In reviewing a decision of the Tax Tribunal, we are bound by its factual determinations. Miedema Metal Building Systems, Inc. v. Dep't of Treasury, 127 Mich.App. 533, 536, 338 N.W.2d 924 (1983). Where fraud is not alleged, our review is limited to the question whether the tribunal committed an error of law or adopted a wrong principle. Id.

M.C.L. Sec. 205.94(f); M.S.A. Sec. 7.555(4f) provides in pertinent part:

Property sold to a person engaged in a business enterprise and using and consuming the property in the tilling, planting, caring for, or harvesting of the things of the soil or in the breeding, raising, or caring for livestock, poultry, or horticultural products, including transfers of livestock, poultry, or horticultural products for further growth. In that case, at the time of the transfer of the tangible personal property, the transferee shall sign a statement, in a form approved by the department, stating that the property is to be used or consumed in connection with the production of horticultural or agricultural products as a business enterprise. The statement shall be accepted by the courts as prima facie evidence of the exemption.... This exemption does not include transfers of food, fuel, clothing, or similar tangible personal property for personal living or human consumption. This exemption shall not include tangible personal property permanently affixed and becoming a structural part of real estate.

We hold that Sec. 4(f) applies to the present case. The primary goal of judicial interpretation of statutes is to ascertain and give effect to the intent of the Legislature. Joy Management Co. v. Detroit, 176 Mich.App. 722, 730, 440 N.W.2d 654 (1989). The legislative intent must be ascertained from the language used in the statute under consideration, given its ordinary significance, and with due regard[189 MICHAPP 573] to the form of the expression. Where the intent is plain, there is no room for construction and we are bound by the expressed intent. Romeo Homes, Inc. v. Comm'r of Revenue, 361 Mich. 128, 135, 105 N.W.2d 186 (1960); National Exposition Co. v. Detroit, 169 Mich.App. 25, 29, 425 N.W.2d 497 (1988). Tax exemption statutes are to be strictly construed in favor of the taxing unit. Miedema, supra, 127 Mich.App. at 536, 338 N.W.2d 924.

Section 4(f), by its plain language, exempts property sold to a business enterprise if the property is used for agricultural or horticultural growth. In the present case, it is not disputed that petitioner is a business enterprise...