Opinion
No. 239177.
Submitted July 10, 2003, at Lansing.
Decided September 2, 2003, at 9:05 a.m. Updated October 24, 2003.
Appeal from Tax Tribunal, LC No. 00-272042.
Michele L. Halloran, PLC (by Michele L. Halloran), for the petitioner.
Michael A. Cox, Attorney General, Thomas L. Casey, Solicitor General, and Kevin T. Smith, Assistant Attorney General, for the respondent.
Before: Neff, P.J., Fort Hood and Borrello, JJ.
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), 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.
Repealed by 2000 PA 403, which enacted a new motor fuel tax act.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.
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 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 N.W.2d 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 N.W.2d 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 N.W.2d 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 N.W.2d 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 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 N.W.2d 119 (1999); Devormer v. Devormer, 240 Mich. App. 601, 605; 618 N.W.2d 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 N.W.2d 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 N.W.2d 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 N.W.2d 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 N.W.2d 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 N.W.2d 450 (2000). Administrative interpretations are entitled to deference. Ludington Service Corp. v. Acting Comm'r. of Ins., 444 Mich. 481, 491; 511 N.W.2d 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 N.W.2d 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.
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 N.W.2d 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 N.W.2d 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.