FISHER & CO INC V DEPT OF TREASURY
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STATE OF MICHIGAN
COURT OF APPEALS
FISHER & COMPANY, INC,
FOR PUBLICATION
January 29, 2009
Plaintiff-Appellee,
v
No. 280476
Court of Claims
LC No. 06-000020-MT
DEPARTMENT OF TREASURY,
Defendant-Appellant.
FISHER & COMPANY, INC,
Plaintiff-Appellant,
v
No. 280498
Court of Claims
LC No. 06-000020-MT
DEPARTMENT OF TREASURY,
Defendant-Appellee.
Before: Murray, P.J., and O’Connell and Davis, JJ.
MURRAY, P.J. (concurring in part and dissenting in part).
I concur in Judge Davis’s opinion to the extent it concludes that the transactions at issue
primarily constitute a purchase of tangible personal property rather than services. In my view,
and as espoused in Judge Davis’s opinion, plaintiff Fisher & Co., Inc., purchased an ownership
interest in the aircraft and then exercised that right of ownership in signing and agreeing to the
terms set forth in the owner’s agreement, management agreement and other related agreements.
However, I dissent from Judge Davis’s conclusion that the trial court erred in calculating the
amount of tax refund to which plaintiff was entitled. Accordingly, I dissent from Judge Davis’s
opinion holding that under MCL 205.94(1)(e) plaintiff was entitled to only deduct the cap of
$1,500 under the North Carolina statute from the amount due to Michigan.
As our courts have repeated since they were established in the 1800’s, our focus in
interpreting statutes is to discern and give effect to the intent of the legislature as found in the
statutes’ plain language. Houdek v Centerville Twp, 276 Mich App 568, 581; 741 NW2d 587
(2007). When, as in this case, a term or phrase is undefined by the legislature and has a peculiar
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meaning under the law, we resort to a legal dictionary to help determine its meaning. See,
Vodvarka v Grasmeyer, 259 Mich App 499, 510; 675 NW2d 847 (2003).
As noted in Judge Davis’s opinion, MCL 205.94(1)(e) provides that for those sales or
uses of property that were already taxed by another state, the Michigan use tax is subject to “a
rate measured by the difference between the rate provided in this Act and the rate by which the
previous tax was computed.” The North Carolina sales tax statute to which plaintiff’s ownership
interest was taxed provides for a “rate of three percent,” but also contains a maximum cap of
$1,500. NC Gen Statute § 105-164-4(a)(1)(b). According to Black’s Law Dictionary (7th ed),
“tax rate” is defined as “a mathematical figure for calculating a tax, usually expressed as a
percentage.” Utilizing this definition, the tax rate, i.e. the mathematical figure used for
calculating a tax, was three percent under the North Carolina statute. Accordingly, three percent
is the “rate by which the previous tax was computed.” The fact that the North Carolina
legislature included a cap for larger purchases, does not change the fact that the “tax rate”
utilized in North Carolina is three percent.
Utilization of caps or similar tax schemes is not uncommon and our legislature could
have indicated in the Michigan use tax statute that it would be subject to any cap or that the
Michigan liability would be reduced by whatever amount was actually paid by the taxpayer in
another state. However, the legislature was not that specific and instead utilized the phrase “tax
rate,” which under the dictionary and common parlance means the percentage utilized to
calculate a tax. As indicated, that was three percent under the North Carolina statute, and
therefore three percent of the purchase price should be deducted from plaintiff’s Michigan use
tax liability.
/s/ Christopher M. Murray
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