Newsletter - Winter 2005
Michigan Treasury Department Continues to Deny Refunds for Use Tax on Inventory
by Edward J. Castellani
The Michigan Treasury Department continues to deny claims for refund to dealers who have paid the 2½%, 2%, plus $30.00 x 6% use tax on inventory, which Treasury has been assessing on dealers. In spite of the fact that the Michigan Tax Tribunal and Crown Motors of Charlevoix, Inc. vs. Michigan Department of Treasury, which decision was affirmed by the Michigan Court of Appeals, ruled that the Treasury Department could not assess and collect the tax, the Treasury Department refuses to acquiesce that decision. The Treasury Department continues to deny claims for refund for dealers who have paid the tax in the past and continues to assess the tax on dealers who are being audited.
There are currently at least four cases pending in the Michigan Court of Claims and the Michigan Tax Tribunal contesting Treasury’s right to assess and collect this tax.
Dealers should consult with tax counsel as to whether they should pay the tax, and if they have paid the tax in past years, whether they should request a refund.
Mr. Castellani is a member of our Business Department. He practices in the Lansing office and may be contacted at 517.377.0845 or toll free at 800.748.0436. You can also contact him via e-mail at ecastellani@fraserlawfirm.com.