DANSE CORP V CITY OF MADISON HEIGHTS
Annotate this Case
Download PDF
STATE OF MICHIGAN
COURT OF APPEALS
DANSE CORPORATION,
UNPUBLISHED
March 23, 2001
Petitioner-Appellant,
v
No. 215486
Tax Tribunal
LC No. 230939
CITY OF MADISON HEIGHTS,
Respondent-Appellee.
Before: Sawyer, P.J., and Murphy and Fitzgerald, JJ.
PER CURIAM.
Petitioner appeals from a decision of the Michigan Tax Tribunal including certain items
of personal property in its property tax assessments for tax years 1994 through 1997. We affirm.
At issue are plastic injection molds and related components used in the manufacture of
roof line ridge vents sold by petitioner. Petitioner claim that these molds should be excluded
under the “special tools” exemption in MCL 211.9b; MSA 7.9(2). The tribunal rejected that
claim, concluding the molds do not come within the definition of “special tools.” We agree.
MCL 211.9b; MSA 7.9(2) provides as follows:
(1) All special tools are exempt from taxation.
(2) As used in this section, “special tools” means those manufacturing
requisites, such as dies, jigs, fixtures, molds, patterns, gauges, or other tools, as
defined by the state tax commission, that are held for use and not for sale in the
ordinary course of business.
(3) Special tools are not exempt from taxation if the value of the special
tools is included in the valuation of inventory produced for sale.
The state tax commission exercised its responsibility to define “special tools” by adopting Rule
21, which provides as follows:
-1-
“Special tools” as used in section 9b of the act means those finished or
unfinished devices such as dies, jigs, fixtures, molds, patterns and special gauges,
used or being prepared for use in the manufacturing function for which they are
designed or are acquired or made for the production of products or models and are
of such a specialized nature that their utility and amortization cease with the
discontinuance of such products or models. [1979 AC, R 209.21]
Respondent, as well the Michigan Municipal League in its amicus curiae brief, urge us to also
consider the following factors set forth in the Michigan State Tax Commission Assessors’
Manual, Chapter 15, pp 15-6 and 15-7:
The following guidelines should be used by the assessor when making the
determination of whether a particular device is a special tool.
1. Special tools include devices such as dies, jigs, fixtures, molds,
patterns, and gauges. Special tools do not include devices which differ
in nature from dies, jigs, fixtures, molds, patterns, and gauges. Thus
the press into which a die is placed is not a special tool.
2. Special tools are specially designed to produce a particular product and
could not be used to produce a different product.
3. Special tools are used to produce models or products which are
expected to change. Thus, a die used to produce a car fender is likely a
special tool because the fender will predictably change, whereas a
mold used in the manufacture of a common wrench will not change for
many years and is not a special tool.
4. Special tools frequently become obsolete before they wear out and
therefore have a short useful life.
5. Models or products produced by special tools are usually expected to
change within 3 years.
6. A die, jig, etc., may have a short life simply because it wears out fast
rather than because it is used to produce a model. In this case the tool
would not be exempt as a special tool.
7. The term “amortization” used by the State Tax Commission in its
definition of special tools refers to the writing off of an expenditure
over a certain period of time. This reference to amortization in the
definition of special tools is more of a descriptive aid than a condition
that must be met.
The first issue we must address is whether the factors set forth above from the Assessor’s
Manual are determinative. We agree with respondent and the amicus that they are.
-2-
First, the amicus curiae directs our attention to MCL 211.10e; MSA 7.10(5), which
provides as follows:
All assessing officials, whose duty it is to assess real or personal property
on which real or personal property taxes are levied by any taxing unit of the state,
shall use only the official assessor’s manual or any manual approved by the state
tax commission, consistent with the official assessor’s manual, with their latest
supplements, as prepared or approved by the state tax commission as a guide in
preparing assessments. Beginning with the tax assessing year 1978, all assessing
officials shall maintain records relevant to the assessments, including appraisal
record cards, personal property records, historical assessment data, tax maps, and
land value maps consistent with standards set forth in the assessor’s manual
published by the state tax commission.
Further, the Attorney General has issued an opinion which reinforces the position that assessors
are obligated to use the manual in preparing assessments:
The use of the Assessor’s Manual as a guide in preparing assessments is
mandated by 1962 PA 122, § 1, supra, in the commanding language of “shall”
directed to public officers. Thus, there is a duty on the part of local assessors to
observe the Assessor’s Manual as a guide in preparing assessments. [1981 OAG
5909, p 207.]
Second, exemption statutes must be strictly construed in favor of the taxing unit. Ladies
Literary Club v Grand Rapids, 409 Mich 748, 753; 298 NW2d 422 (1980). This Court applied
that principle in University Microfilms v Scio Twp, 76 Mich App 616; 257 NW2d 265 (1977), to
reach the conclusion that master microfilm negatives are not “special tools.” At issue in
University Microfilms is whether master microfilm negatives of printed material used to produce
additional copies for sale to others constitutes a “special tool.” This Court agreed with the Tax
Tribunal that such master microfilm negatives do not constitute a special tool, stating:
In its opinion, the tax tribunal found that plaintiff’s master negatives do
not wear out or become obsolete in a short time and therefore do not come within
the definition of “special tool”. Plaintiff argues that master negatives are used as a
pattern to reproduce an image and are therefore similar to molds, dies and the like.
Additionally, plaintiff submits that there is no requirement that the tool be short
lived in order to qualify as a “special tool”, and to the extent that the tax
commission’s definition contains that requirement it is erroneous.
. . . The tax commission has defined these items. We agree with the tax
tribunal that plaintiff’s master negatives do not meet the definition. [University
Microfilms, supra at 621-622.]
Therefore, University Microfilms appears to accept a definition of “special tools” that includes a
limited life expectancy.
-3-
Furthermore, the Michigan Supreme Court has relied upon the Assessor’s Manual in a
number of cases. In Antisdale v Galesburg, 420 Mich 265, 276 n 1; 362 NW2d 632 (1985), the
Court relied upon the manual to provide a description of the three valuation methods employed
by the tax commission. In Edward Rose Building Co v Independence Twp, 436 Mich 620, 636637; 462 NW2d 325 (1990), the Court quoted from a portion of the Antisdale footnote in a
discussion of the meaning of “market value.” Finally, in Ford Motor Co v State Tax
Commission, 400 Mich 499, 523 n 7; 255 NW2d 608 (1977), Justice Williams’ dissent makes
reference to the manual in a footnote.
For the above reasons, we conclude that the tax tribunal properly relied upon the factors
in the Assessor’s Manual in defining “special tool.” Further, there is no indication that the molds
have a limited life span. Therefore, they do not meet the definition, particularly with respect to
factors 3, 4 and 5.
Turning to the valuation issues raised by petitioner, we first address petitioner’s challenge
to the tribunal’s use of the cost approach in determining the value of the molds. The tribunal’s
decision on valuation essentially went as follows: there are three approaches to valuation, the
market approach, the income approach and the cost approach. It rejected the market approach
because it found the market to be too specialized to produce accurate numbers. It further rejected
the income approach because neither party supplied adequate data to make use of the income
approach. Therefore, the tribunal settled on the cost approach. We cannot say that the tribunal’s
reasoning is irrational. There is no ready market in molds that make a specific roof vent, nor can
the tribunal be expected to employ a valuation method if neither party provides evidence under
that method. Accordingly, the tribunal’s decision to employ the cost approach was not
erroneous.
Petitioner’s remaining arguments concerning valuation all relate to application of the
income approach and the market approach. Because neither of those approaches were utilized by
the tribunal, petitioner’s arguments are moot.
Affirmed.
/s/ William B. Murphy
/s/ E. Thomas Fitzgerald
-4-
Some case metadata and case summaries were written with the help of AI, which can produce inaccuracies. You should read the full case before relying on it for legal research purposes.
This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.
