DAIMLER CHRYSLER CORP V DEPT OF TREASURY
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STATE OF MICHIGAN
COURT OF APPEALS
FOR PUBLICATION
September 2, 2003
9:05 a.m.
DAIMLERCHRYSLER CORPORATION,
Petitioner-Appellant/CrossAppellee,
v
No. 239177
Tax Tribunal
LC No. 00-272042
DEPARTMENT OF TREASURY,
Respondent-Appellee/CrossAppellant.
Updated Copy
October 24, 2003
Before: Neff, P.J., Fort Hood and Borrello, JJ.
PER CURIAM.
Petitioner DaimlerChrysler Corporation appeals as of right the Tax Tribunal's decision to
apply the one-year statute of limitations provided in MCL 207.112(2),1 rather than the four-year
statute of limitations provided in MCL 205.27a(2) and MCL 205.30(2). Respondent Department
of Treasury cross-appeals the tribunal's award of interest on petitioner's tax refund. We affirm in
part, reverse in part, and remand.
I
Petitioner sought refunds from the state of Michigan regarding taxes paid for fuel left in
the fuel tanks of vehicles sold to out-of-state dealers. Respondent refunded taxes paid for the
year before petitioner's January 30, 1998, refund request but asserted that the one-year period of
limitations barred any recovery of taxes paid earlier. Respondent also declined to pay interest on
the taxes it refunded, arguing that the refund request did not constitute the filing of a claim
sufficient to trigger an award of interest.
In its automobile manufacturing process, petitioner places a certain amount of motor fuel
in the fuel tank of each new vehicle. During the periods at issue in this case, petitioner
purchased fuel for that purpose and paid state motor fuel taxes. Some of the fuel was consumed
during off-highway testing but the rest remained in the fuel tanks. The vehicles were then
shipped to retail car dealers both inside and outside the state. Respondent conceded that the fuel
shipped outside the state in vehicles did not constitute consumption or combustion of fuel within
1
Repealed by 2000 PA 403, which enacted a new motor fuel tax act. The parties agree that the
amendment does not apply retroactively to petitioner.
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the state. Pursuant to subsection 12(2), a taxpayer may request a refund when the gasoline was
"used for a purpose other than the operation of a motor vehicle" on this state's roads or highways.
II
This Court reviews a decision of the Tax Tribunal to determine whether it was authorized
by law and based on competent, material, and substantial evidence. MCL 24.306; Czars, Inc v
Dep't of Treasury, 233 Mich App 632, 637; 593 NW2d 209 (1999). We review issues of
statutory interpretation de novo as questions of law. Oakland Co Bd of Rd Comm'rs v Michigan
Prop & Cas Guaranty Ass'n, 456 Mich 590, 610; 575 NW2d 751 (1998).
III
Petitioner argues that its request for refunds is not governed by the fuel tax act, MCL
207.101 et seq., but by the general tax refund statute, MCL 205.30(2), because petitioner did not
use the disputed fuel to power vehicles. We disagree simply because the only reason fuel is
placed into a vehicle is to power the vehicle. Additionally, tax was imposed on gasoline at the
point of sale, MCL 207.102(1); MCL 207.108a, regardless of its ultimate use, Ammex, Inc v
Dep't of Treasury, 237 Mich App 455, 470; 603 NW2d 308 (1999). However, petitioner is not
without a remedy for the fuel used to power vehicles that are shipped out of state. Pursuant to
subsection 12(2), a purchaser who used gasoline for purposes other than the operation of a motor
vehicle in this state may later seek a refund.
Petitioner argues it is not entitled to a refund under subsection 12(2) because petitioner
did not "use" the fuel. However, the fuel tax act did not define "use." When a term is not
defined in a statute, we must give the term its plain and ordinary meaning and may consult a
dictionary definition. Koontz v Ameritech Services, Inc, 466 Mich 304, 312; 645 NW2d 34
(2002). The word "use" is defined as "make use of, put to use, operate, employ." Random
House Webster's College Dictionary (1999). Here, petitioner "used" the gasoline by removing it
from storage and putting it into the vehicles petitioner produced, which were then driven onto a
motor vehicle carrier. Therefore, petitioner's right to a refund is governed subsection 12(2),
which stated in part:
The purchaser of gasoline used for a purpose other than the operation of a
motor vehicle on the public roads, streets, and highways of this state, a person
operating a passenger vehicle of a capacity of 5 or more under a municipal
franchise, license, permit, agreement, or grant, respectively, a person operating a
passenger vehicle for the transportation of school students under a certificate of
authority issued by the state transportation department . . . and community action
agencies . . . which are not a part or division of a political subdivision of this state
shall be entitled to a refund of the tax on the gasoline. Community action
agencies shall make the refund a state-contributed non-federal share to grants
received by such community action agencies from the community services
administration . . . by filing a verified claim with the department upon forms
prescribed and to be furnished by it, within 1 year after the date of purchase, as
shown by the invoice. A claim mailed within the 1-year period, as evidenced by
the postmark, when received by the department, shall be considered as filed
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within the required time. . . . The retail dealer shall furnish the purchaser with an
invoice, showing the amount of gasoline purchased, the date of purchase, and the
amount of tax on the purchase, and the dealer shall at the request of the
department immediately supply the department with a copy of an invoice issued
by the dealer during a 1-year period preceding the request. . . .
Petitioner next argues that subsection 12(2), by its clear language, imposed a period of
limitations only on community action agencies. We disagree.
Judicial construction is not permitted if a statute's language is clear and unambiguous.
Sun Valley Foods Co v Ward, 460 Mich 230, 236; 596 NW2d 119 (1999); Devormer v
Devormer, 240 Mich App 601, 605; 618 NW2d 39 (2000). Courts must not speculate beyond
the Legislature's words. Michigan Residential Care Ass'n v Dep't of Social Services, 207 Mich
App 373, 377; 526 NW2d 9 (1994).
Further, language must be read within its grammatical context unless something else was
clearly intended. Sun Valley, supra at 237. We consider punctuation, including the effect of a
period. See, e.g., Mayor of Lansing v Public Service Comm, 257 Mich App 1, 14; 666 NW2d
298 (2003). However, we are not bound by punctuation, where another meaning was clearly
intended. In the present case, the period separating the first and second sentences of subsection
12(2) suggests the meaning petitioner asserts. However, the second sentence then makes little
sense. A reading of the two sentences without regard to punctuation reveals an entirely different
meaning, consistent with the tribunal's interpretation.
Because the statutory language itself creates an ambiguity, we may engage in judicial
construction. Sun Valley, supra at 236. We must determine a reasonable construction that best
reflects the Legislature's intent. Frankenmuth Mut Ins Co v Marlette Homes, Inc, 456 Mich 511,
515; 573 NW2d 611 (1998).
Generally, ambiguous tax statutes are strictly construed in the taxpayer's favor. Michigan
Bell Tel Co v Dep't of Treasury, 445 Mich 470, 477; 518 NW2d 808 (1994). However, statutes
setting qualifications for a tax exemption are strictly construed in the government's favor.
Guardian Industries Corp v Dep't of Treasury, 243 Mich App 244, 249; 621 NW2d 450 (2000).
Administrative interpretations are entitled to deference. Ludington Service Corp v Acting
Comm'r of Ins, 444 Mich 481, 491; 511 NW2d 661 (1994). Pursuant to 1979 AC, R 207.11,
MCL 207.112(2) was interpreted as imposing a one-year period of limitations on all gasoline
purchasers seeking a gasoline tax refund.
More significantly, before the Legislature enacted 1992 PA 482, the provisions at issue
were found in one long sentence, which clearly stated that the period of limitations applied to all
persons seeking the refund. See 1980 PA 482. Although amendments are generally construed to
change a statute's meaning, they may also be intended only to clarify the meaning. Ettinger v
Lansing, 215 Mich App 451, 455; 546 NW2d 652 (1996). We find that the Legislature's
insertion of a period in subsection 12(2) was an attempt to break up a long sentence into two,
more manageable sentences that failed to consider the grammatical consequences of the change.
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Under the interpretation that best reflects the Legislature's likely intent, subsection 12(2)
imposed a one-year filing requirement on all persons seeking motor fuel refunds. The tribunal,
therefore, did not err when it denied petitioner's request for a refund of taxes paid more than one
year before the request was made.
IV
Respondent cross-appeals the tribunal's decision to award petitioner interest on the refund
respondent properly paid. The motor fuel tax was administered pursuant to the general revenue
act, MCL 205.1 et seq. Specifically, the interest provisions in the general revenue act apply to
motor fuel refunds. Elsheick v Dep't of Treasury, 225 Mich App 575, 577; 571 NW2d 570
(1997). Interest begins accruing forty-five days "after the claim is filed." MCL 205.30(3).
In Lindsay Anderson Sagar Trust v Dep't of Treasury, 204 Mich App 128, 131-132; 514
NW2d 514 (1994), we held that under MCL 205.30(3), interest begins accruing when a claim is
filed, not when the department receives the supporting information necessary to process the
claim. We determined further that a claim is filed when the department receives adequate notice
of the claim. Id. at 132.
Respondent argues that the present case is distinguishable because subsection 12(2)
imposed specific requirements for the filing of a motor fuel tax refund. However, the interest
begins to accrue regardless of what information is required to process the claim, Lindsay
Anderson Sagar Trust, supra at 131-132; this includes information required by statute or
administrative rule specifically for fuel tax refunds. Respondent's correspondence indicates it
considered petitioner's requests to be claims. Further, claim filing requires only adequate notice,
id. at 132; thus, filing of the specific forms referenced in subsection 12(2) was not required to
trigger the interest provision.
The tribunal did not err by ordering respondent to pay interest. However, the tribunal
erroneously held that the interest began accruing on the entire refund request forty-five days after
the initial request. That request could not have provided adequate notice of refunds for different
periods, which were only requested in later correspondence. Thus, the accrual period for each
refund requested must be calculated separately. We therefore reverse the tribunal's order
regarding interest and remand to the tribunal to make those calculations and issue an order
setting forth the correct accrual dates.
Affirmed in part, reversed in part and remanded. We do not retain jurisdiction.
/s/ Janet T. Neff
/s/ Karen M. Fort Hood
/s/ Stephen L. Borrello
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