Opinion
366158
06-20-2024
BRUCE C. MAAG, Petitioner-Appellant, v. DEPARTMENT OF TREASURY, Respondent-Appellee
UNPUBLISHED
Tax Tribunal LC No. 22-001244
Before: O'BRIEN, P.J., and M. J. KELLY and FEENEY, JJ.
PER CURIAM
Petitioner, Bruce C. Maag, appeals the order of the Michigan Tax Tribunal (MTT) ruling that he was not entitled to a principal residence exemption (PRE) with respect to his Michigan property for the tax years 2018, 2019, 2020, and 2021. We affirm.
This appeal was taken as an appeal of right from the April 26, 2023 proposed opinion and judgment of an MTT administrative law judge (ALJ). Since the April 26, 2023 order was not a final order at the time the appeal was taken, this Court does not have jurisdiction over the appeal as of right. Nevertheless, recognizing that the MTT presiding judge adopted the ALJ's recommendations in a final judgment and opinion entered on June 12, 2023, and thereby rendered the proposed opinion and judgment into a final order appealable as of right, we exercise our discretion to decide the appeal on the merits. Had the claim of appeal been dismissed before the June 12, 2023 judgment was entered, petitioner-appellant would have had a valid appeal of right in which he would be able to raise the issues now before this Court. In the interest of judicial economy, we are therefore treating this appeal as properly filed from the June 12, 2023 final judgment.
I. BACKGROUND
Petitioner owns two residential properties, one located in Brutus, Michigan (the Michigan property) and one located in Lima, Ohio (the Ohio property). Petitioner's Michigan property is the subject of this dispute. Petitioner received a PRE for the Michigan property in 2018, 2019, 2020, and 2021. During these same years, petitioner received a substantially similar exemption for the Ohio property as well. In addition, petitioner filed Ohio tax returns as an Ohio resident and filed nonresident Michigan tax returns for tax years 2018, 2019, and 2020. Following an audit, respondent determined that petitioner did not occupy the subject property and retroactively denied petitioner's PRE for the Michigan property for the tax years at issue. Respondent conducted an informal conference following the denial, and the referee recommended that the PRE for the Michigan property be denied. The referee's recommendation was adopted by the Bureau of Tax Policy director in a decision and order of determination.
Petitioner appealed respondent's decision to the Small Claims Division of the MTT. Petitioner provided evidence that he had amended his Ohio and Michigan tax returns to reflect that he was a Michigan resident once he received the PRE denial. Petitioner also provided evidence of his occupancy at the Michigan property for the tax years at issue. In response, and in support of its position that petitioner was not entitled to a PRE for the Michigan property, respondent submitted petitioner's nonresident Michigan tax returns and Ohio tax returns as an Ohio resident for tax years 2018, 2019, and 2020. Respondent also provided evidence that petitioner had claimed and received a substantially similar exemption for the Ohio property during the tax years at issue through Ohio tax records.
The MTT conducted a telephone hearing on April 11, 2023. On April 26, 2023, the administrative law judge (ALJ) presiding over the proceedings issued a proposed opinion and judgment. The ALJ found by a preponderance of the evidence that petitioner did own and occupy the Michigan property during the tax years at issue. However, the ALJ also found that petitioner had received a substantially similar exemption on the Ohio property during the tax years at issue. The ALJ concluded that because petitioner received a substantially similar owner-occupied exemption in Ohio pursuant to Oh Rev Code Ann 323.152(B), petitioner was precluded from receiving a PRE under MCL 211.7cc(3)(a). The ALJ acknowledged respondent's additional arguments that petitioner was precluded from receiving a PRE under MCL 211.7cc(3)(c) and MCL 211.7cc(3)(d) because he filed nonresident Michigan tax returns and resident Ohio tax returns, but it stated that analysis of these claims would be superfluous given its conclusion under MCL 211.7cc(3)(a). The ALJ further noted that petitioner's amended Michigan and Ohio tax returns did not negate the previous filing of the returns.
Subsequently, the MTT issued a final opinion and judgment adopting the ALJ's proposed opinion and judgment, incorporating by reference the ALJ's findings of fact and conclusions of law. Therefore, the MTT ruled that petitioner was not entitled to a PRE for the Michigan property under MCL 211.7cc(3)(a) for tax years 2018, 2019, 2020, and 2021.
II. STANDARD OF REVIEW
We are limited in our review of a Tax Tribunal's decision. Campbell v Dep't of Treasury, 509 Mich. 230, 237; 984 N.W.2d 13 (2022). Absent a claim of fraud, this Court reviews the Tax Tribunal's decision for "misapplication of the law or adoption of a wrong principle." Smith v Twp of Forester, 323 Mich.App. 146, 149; 913 N.W.2d 662 (2018) (quotation marks and citation omitted). "[S]tatutes exempting persons or property from taxation must be narrowly construed in favor of the taxing authority." Estate of Schubert v Dep't of Treasury, 322 Mich.App. 439, 447448; 912 N.W.2d 569 (2017). The Tax Tribunal's factual findings are conclusive and will not be disturbed if they are supported by competent, material, and substantial evidence on the whole record. Id.
This Court reviews questions of statutory interpretation de novo. Campbell, 509 Mich. at 237. This Court's primary goal is to "understand and give effect to the Legislature's intent as expressed in its words and phrases according to their plain meaning." Id. The Tax Tribunal's interpretation of a tax statute is given "respectful consideration" on appeal, but this Court will enforce an unambiguous statute as written. Id. at 238 (quotation marks and citation omitted). "[T]ax exemptions are strictly construed against the taxpayer because exemptions represent the antithesis of tax equality ...." De Lamielleure Trust v Treasury Dep't, 305 Mich.App. 282, 284; 853 N.W.2d 708 (2014) (quotation marks and citation omitted; alterations in De Lamielleure Trust). "However, ambiguities in the language of a tax statute are resolved in favor of the taxpayer." Id.
III. ANALYSIS
Michigan's PRE, also known as the "homestead exemption," exempts a principal residence from" 'the tax levied by a local school district for school operating purposes . . . if an owner of that principal residence claims an exemption.'" Schubert, 322 Mich.App. at 448, quoting MCL 211.7cc(1). Michigan's PRE is governed by MCL 211.7cc and MCL 211.7dd. Foster v Van Buren Co, 332 Mich.App. 273, 281; 956 N.W.2d 554 (2020). MCL 211.7cc provides, in relevant part:
(1) A principal residence is exempt from the tax levied by a local school district for school operating purposes to the extent provided under section 1211 of the revised school code, 1976 PA 451, MCL 380.1211, if an owner of that principal residence claims an exemption as provided in this section....
(2) Except as otherwise provided in subsection (5), an owner of property may claim 1 exemption under this section by filing an affidavit .... The affidavit shall state that the property is owned and occupied as a principal residence by that owner of the property on the date that the affidavit is signed and shall state that the owner has not claimed a substantially similar exemption, deduction, or credit on property in another state.... [Emphasis added.
MCL 211.7cc(5) governs rescission of a claim of exemption.
MCL 211.7cc has been amended several times since petitioner claimed a PRE for the earliest tax year at issue; however, the quoted language remained the same after each amendment. See 121 PA 2017; 133 PA 2018; 633 PA 2018; 96 PA 2020; 141 PA 2022.
The statute also enumerates the factors that preclude an otherwise eligible taxpayer from claiming a PRE. See MCL 211.7cc(3). Relevant to petitioner's case, MCL 211.7cc(3) precludes a taxpayer from claiming a PRE if:
(a) That person has claimed a substantially similar exemption, deduction, or credit, regardless of amount, on property in another state.... A claim for a substantially similar exemption, deduction, or credit in another state occurs at the
time of the filing or granting of a substantially similar exemption, deduction, or credit in another state. If the assessor of the local tax collecting unit, the department of treasury, or the county denies an existing claim for exemption under this section, an owner of the property subject to that denial cannot rescind a substantially similar exemption, deduction, or credit claimed in another state in order to qualify for the exemption under this section for any of the years denied....
* * *
(c) That person has filed a nonresident Michigan income tax return, except active duty military personnel stationed in this state with his or her principal residence in this state.
(d) That person has filed an income tax return in a state other than this state as a resident, except active duty military personnel stationed in this state with his or her principal residence in this state....[Emphasis added.
MCL 211.7cc has been amended several times since petitioner claimed a PRE for the earliest tax year at issue; however, subsection (3) remained the same after each amendment. See 121 PA 2017; 133 PA 2018; 633 PA 2018; 96 PA 2020; 141 PA 2022.
On appeal, petitioner argues that MCL 211.7cc(3)(a) is ambiguous and should be construed in his favor. However, the Michigan Supreme Court has held that the statute is "clear on its face" and that the Legislature explicitly provided that taxpayers who received substantially similar exemptions, deductions, or credits on property in another state are not entitled to an exemption under the statute. Campbell, 509 Mich. at 241. Accordingly, we enforce the statute as written. See id. at 237.
Petitioner also argues that the MTT's decision that he was not entitled to a PRE for the Michigan property was based solely on a "wrongly checked box" indicating non-resident status on his Michigan income tax returns. Petitioner contends that his amended tax returns entitled him to a PRE for the tax years at issue. In his argument, petitioner makes only conclusory statements that his amended tax returns entitle him to a PRE, but he provides no legal or statutory authority to support his position. We therefore consider this argument to be abandoned for failure to adequately brief the merits of the alleged error. See Mitcham v City of Detroit, 355 Mich. 182, 203; 94 N.W.2d 388 (1959) ("It is not enough for an appellant in his brief simply to announce a position or assert an error and then leave it up to this Court to discover and rationalize the basis for his claims, or unravel and elaborate for him his arguments, and then search for authority either to sustain or reject his position.").
Even addressing the merits of petitioner's argument, petitioner ignores the actual basis of the MTT's decision. The MTT based its decision on MCL 211.7cc(3)(a), which explicitly disqualifies a taxpayer from receiving a PRE if they also claimed a substantially similar tax exemption in another state. The record reflects that petitioner received a substantially similar property tax exemption on the Ohio property for the tax years at issue. Specifically, petitioner received an "owner-occupied credit" for the Ohio property for the tax years at issue under Oh Rev Code Ann 323.152(B). Petitioner does not dispute that this credit was "substantially similar" to the PRE for purposes of MCL 211.7cc(3)(a). Accordingly, the MTT correctly concluded that petitioner was precluded from receiving a PRE on the Michigan property for tax years 2018, 2019, 2020, and 2021 under the plain language of MCL 211.7cc(3)(a).
Finally, petitioner argues that respondent's failure to recognize petitioner's amended tax returns amounts to a violation of his equal-protection rights. While petitioner did not raise this constitutional claim before the MTT, we may review the merits of a petitioner's unpreserved constitutional claim on appeal. See Electronic Data Sys Corp v Flint Twp, 253 Mich.App. 538, 551; 656 N.W.2d 215 (2002). In his brief, petitioner does not provide caselaw or statutory authority to support his equal-protection argument; rather, he provides a comparative analysis of uniformity clauses in state constitutions largely taken from a source that is not properly attributed. Petitioner's comparative analysis fails to address Michigan's tax laws or the statutes at issue in this case, and it does not appear to be relevant to petitioner's case. Accordingly, petitioner's equal-protection claim is similarly abandoned on appeal. See Mitcham, 355 Mich. at 203.
Affirmed.