Ford Motor Company v. Department of Treasury

Michigan Supreme Court
Lansing, Michigan

Syllabus
Chief Justice: Justices:
Robert P. Young, Jr. Michael F. Cavanagh
Stephen J. Markman
Mary Beth Kelly
Brian K. Zahra
Bridget M. McCormack
David F. Viviano
This syllabus constitutes no part of the opinion of the Court but has been Reporter of Decisions:
prepared by the Reporter of Decisions for the convenience of the reader. Corbin R. Davis

FORD MOTOR COMPANY v DEPARTMENT OF TREASURY

Docket No. 146962. Argued April 2, 2014 (Calendar No. 1). Decided June 26, 2014.

Ford Motor Company brought an action in the Court of Claims against the Department of
Treasury, seeking a refund of taxes it had paid under protest after defendant had determined that
contributions made to the voluntary employees’ beneficiary association (VEBA) trust fund
plaintiff had established were taxable under the now repealed Single Business Tax Act (SBTA),
MCL 208.1 et seq. The Court of Claims, Paula J. M. Manderfield, J., rejected plaintiff’s claim
that the VEBA contributions were not taxable under the SBTA and granted summary disposition
to defendant. Plaintiff appealed and the Court of Appeals, ZAHRA, P.J., and WHITBECK and M. J.
KELLY, JJ., reversed, holding that the VEBA contributions were not taxable under the SBTA.
288 Mich App 491 (2010). The Supreme Court denied defendant’s application for leave to
appeal. 488 Mich 1026 (2011). Plaintiff filed a motion in the Court of Claims to enforce the
Court of Appeals’ judgment. Before the motion was decided, the Treasury calculated that it
owed plaintiff $15 million, rather than the $17 million that plaintiff claimed was due, and
remitted $15 million to plaintiff. The approximate $2 million difference resulted in part from the
parties’ disagreement regarding the date that plaintiff filed its claim for a refund, thus triggering
interest accumulation on the refund under MCL 205.30. The parties agreed that overpayment
interest began accruing 45 days after the date that plaintiff provided the Treasury with adequate
notice of a claim for refund of tax overpayment, but plaintiff argued that September 17, 2005,
was the correct date to calculate the amount of overpayment interest because it was 45 days after
plaintiff responded to the Treasury’s August 3, 2005 Audit Determination Letter, while the
Treasury argued that plaintiff had not provided adequate notice until December 13, 2006, when it
filed its initial complaint in the Court of Claims. The Court of Claims ruled in plaintiff’s favor,
ordered the Treasury to pay additional overpayment interest, and directed the Treasury to pay
costs and attorney fees to plaintiff. The Treasury appealed, and after reconsideration, in an
unpublished opinion per curiam issued February 26, 2013 (Docket No. 306820), the Court of
Appeals, WHITBECK, P.J., and FITZGERALD and BECKERING, JJ., reversed the trial court on the
calculation of overpayment interest, vacated the award of attorney fees, and remanded to the trial
court for further consideration of the attorney fees. The Supreme Court granted leave to appeal,
asking the parties to address issues related to the calculation of interest on the refund. 495 Mich
861 (2013).

In an opinion by Justice CAVANAGH, joined by Justices KELLY, ZAHRA, and
MCCORMACK, the Supreme Court held:
In order to trigger the accrual of interest on a tax refund under MCL 205.30, a taxpayer
must pay the disputed tax, make a claim or petition for a refund, and file the claim or petition.
Although a claim or petition need not take any specific form, it must clearly demand, request, or
assert a right to a refund of tax payments made to the Department of Treasury that the taxpayer
asserts are not due. Additionally, in order to file the claim or petition, a taxpayer must submit
the claim to the Treasury in a manner sufficient to provide the Treasury with adequate notice of
the taxpayer’s claim. Because plaintiff’s August 25, 2006 letter to the Treasury satisfied all the
requirements of MCL 205.30, pursuant to MCL 205.30(3), interest began accruing on the refund
45 days later, on October 9, 2006.

1. Under MCL 205.30(1), the Treasury must credit or refund taxes erroneously collected.
MCL 205.30(2) establishes what a taxpayer who paid a tax must do to obtain a refund of the
amount paid. Therefore, in order to seek a tax refund, a taxpayer must first have paid the tax at
issue.

2. A taxpayer’s claim or petition for a refund under MCL 205.30(2) need not take any
specific form as long as it clearly requests or demands that the Treasury return tax payments that
the taxpayer asserts were not due. The Revenue Act does not define “petition” or “claim” as
used in MCL 205.30; however, the relevant dictionary definitions of these terms indicated that a
taxpayer must only demand, request, or assert an existing right to the refund.

3. Under MCL 205.30(3), interest must only be “added to the refund commencing 45
days after the claim is filed.” While the Revenue Act does not define “filed,” the relevant
dictionary definitions indicated that, in order for a taxpayer’s claim for refund to trigger the 45-
day waiting period in MCL 205.30(3), the taxpayer must have submitted the claim to the
Treasury in order to inform or notify the Treasury that the taxpayer believed it was entitled to a
refund. This interpretation was consistent with the purpose of the 45-day waiting period between
submission of the claim or petition and the start of interest accumulation on the refund, which
was to allow the Treasury to investigate the taxpayer’s claim for a refund and determine its
validity before interest begins accumulating. In order to give effect to the legislative intent
regarding the 45-day waiting period, the Treasury must be permitted to investigate the claim,
and, in order to investigate the claim, the Treasury must have adequate notice of it.

4. Plaintiff’s expression of disagreement with the Treasury’s August 3, 2005 audit
determination letter was not sufficient to constitute a claim or petition for refund of the money
associated with that determination because it was not a demand for, request for, or assertion of a
right to a refund, as MCL 205.30 requires. Likewise, plaintiff’s November 17, 2005 request for
an informal conference with the Treasury did not constitute a claim or petition for refund under
MCL 205.30 because the request did not include a demand or request for or an assertion of a
right to a refund. However, plaintiff’s August 25, 2006 letter to the Treasury did constitute a
claim or petition for refund under MCL 205.30 because, by referring to MCL 205.22 in
expressing plaintiff’s decision to institute a formal legal action in a court of law, the letter
indicated that plaintiff was claiming a refund as contemplated by MCL 205.22.

5. Plaintiff’s August 25, 2006 letter to the Treasury satisfied the requirement that the
claim or petition for refund of the amount paid be filed because it was mailed to the Treasury
and, as evidenced by the Treasury’s responsive letter dated September 15, 2006, the Treasury
received it. Accordingly, all the requirements of MCL 205.30 were satisfied on August 25,
2006, and pursuant to MCL 205.30(3), interest began accruing on the refund 45 days later, on
October 9, 2006.

Reversed and remanded to the trial court for further consideration of the attorney-fee
issue.

Justice MARKMAN, joined by Chief Justice YOUNG and Justice VIVIANO, concurring in
part and dissenting in part, agreed with Part III of the majority opinion, which held that in order
to trigger the accrual of overpayment interest under MCL 205.30, a taxpayer must pay the
disputed tax, make a claim or petition for a refund, and file the claim or petition. He dissented
from the majority’s conclusion in Part IV that plaintiff’s August 25, 2006 letter to the
Department of Treasury satisfied the statutory requirements of MCL 205.30, because it nowhere
made a claim or petition for any right to a refund. He noted that by considering the letter’s
invocation of MCL 205.22 to constitute a claim for a refund, the majority had conflated that
provision’s two separate requirements that a plaintiff first pay the tax under protest and then
claim a refund as part of the appeal, thereby rendering the requirement that there be a claim of a
refund meaningless. He would have affirmed the result of the Court of Appeals and held that
plaintiff did not satisfy the requirements of MCL 205.30 until it actually filed its complaint,
which included a claim for a refund, in the Court of Claims on December 13, 2006.

Opinion
Chief Justice: Justices:
Robert P. Young, Jr. Michael F. Cavanagh
Stephen J. Markman
Mary Beth Kelly
Brian K. Zahra
Bridget M. McCormack
David F. Viviano

FILED June 26, 2014

STATE OF MICHIGAN

SUPREME COURT

FORD MOTOR COMPANY,

Plaintiff-Appellant,

v No. 146962

DEPARTMENT OF TREASURY,

Defendant-Appellee.

BEFORE THE ENTIRE BENCH

CAVANAGH, J.
In this case, we must determine what actions a taxpayer must take under

MCL 205.30 of the Revenue Act to trigger the accrual of interest on a tax refund. We

hold that in order to trigger the accrual of interest, the plain language of the statute

requires a taxpayer to (1) pay the disputed tax, (2) make a “claim” or “petition” for a

refund, and (3) “file” the claim or petition. Although a “claim” or “petition” need not

take any specific form, it must clearly demand, request, or assert a right to a refund of tax

payments made to the Department of Treasury that the taxpayer asserts are not due.

Additionally, in order to “file” the claim or petition, a taxpayer must submit the claim to
the Treasury in a manner sufficient to provide the Treasury with adequate notice of the

taxpayer’s claim.

I. FACTS AND PROCEDURAL HISTORY

This case began as a dispute between the parties regarding whether plaintiff owed

tax under the now repealed Single Business Tax Act (SBTA) related to plaintiff’s

contributions to its Voluntary Employees’ Beneficiary Association (VEBA) trust fund for

1997 through 2001.

On August 3, 2005, the Treasury sent an Audit Determination Letter informing

plaintiff that the Treasury had determined that the VEBA contributions were taxable

under the SBTA and, on the same day, plaintiff returned the letter to the Treasury after

checking the box on the letter indicating that plaintiff “disagrees with this

determination.”1 The Audit Determination Letter incorporated the Audit Report of

Findings prepared by the Treasury, which acknowledged that plaintiff “disagrees with the

audit determination” and “want[s] to request a hearing on the contested issue.” During

1
The August 3, 2005 Audit Determination Letter stated:

Michigan Department of Treasury[,] Audit Determination Letter[,] Single
Business Tax[,] Taxpayer Name: FORD MOTOR COMPANY[,] Account
No. 380549190[,] Audit Determination[,] Audit Period: 12/01/1997 to
12/31/2001[.] Net Tax Due $19,742,347[.] Interest 1,641,958[.]
Penalty 0[.] Total Amount Due 21,384,305[.] The above determination is
subject to final review and approval by the Michigan Department of
Treasury. . . Taxpayer ___ agrees with this determination. ___ disagrees
with this determination . . . Appeal Rights[.] If you disagree with this
deficiency, please wait until you receive a notice of ‘intent to assess’
additional tax, penalty or interest and then file your written request for an
informal conference (within 30 days after receipt) to the Michigan
Department of Treasury[.]

2
the audit process, plaintiff provided the Treasury with detailed summaries of the amount

of disputed tax for each tax year.

On November 17, 2005, plaintiff requested an informal conference with the

Treasury regarding the determination that the VEBA contributions were taxable, among

other issues. On August 25, 2006, plaintiff sent a letter to the Treasury withdrawing

plaintiff’s request for an informal conference, informing the Treasury that plaintiff

intended to file a complaint in the Court of Claims, and requesting that the Treasury

verify that the disputed tax liability was satisfied with unassigned funds that plaintiff had

on deposit with the Treasury. Plaintiff’s August 25, 2006 letter stated that application of

plaintiff’s funds on deposit with the Treasury should be viewed as a payment “under

protest” under MCL 205.22. On September 15, 2006, the Treasury sent plaintiff a Final

Audit Determination letter assessing plaintiff a tax liability approximately $20 million

greater than the single business tax plaintiff previously paid. The Treasury also stated

that plaintiff owed approximately $2 million in tax deficiency interest. On September 19,

2006, plaintiff informed the informal conference division that it was withdrawing its

request.

On December 13, 2006, plaintiff filed a complaint in the Court of Claims asserting

that the VEBA contributions were not taxable under the SBTA. That court rejected

plaintiff’s claim and granted summary disposition to the Treasury. Plaintiff appealed and

the Court of Appeals reversed, holding that the VEBA contributions were not taxable

under the SBTA. Ford Motor Co v Dep’t of Treasury, 288 Mich App 491; 794 NW2d

357 (2010), lv den 488 Mich 1026 (2011).

3
On August 29, 2011, plaintiff filed a motion in the Court of Claims to enforce the

Court of Appeals’ judgment. Before the motion was decided, the Treasury calculated

that it owed plaintiff $15 million rather than the $17 million that plaintiff claimed was

due and, on September 19, 2011, the Treasury remitted $15 million to plaintiff. The

approximate $2 million difference resulted in part from the parties’ disagreement

regarding the date that plaintiff filed its claim for a refund, thus triggering interest

accumulation on the refund under MCL 205.30.

At a hearing, the parties agreed that overpayment interest began accruing 45 days

after the date that plaintiff provided the Treasury with adequate notice of a claim for

refund of tax overpayment. Regarding the difference between plaintiff’s claim that it was

entitled to a $17 million refund rather than the $15 million refund that the Treasury

provided, plaintiff argued that September 17, 2005, was the correct date to calculate the

amount of overpayment interest because it was 45 days after plaintiff responded to the

Treasury’s August 3, 2005 Audit Determination Letter, which plaintiff argued constituted

adequate notice of a claim of refund. The Treasury argued that plaintiff did not provide

adequate notice until December 13, 2006, when plaintiff filed its initial complaint in the

Court of Claims and, therefore, the correct date for calculating the overpayment interest

was 45 days after December 13, 2006.

The Court of Claims held in plaintiff’s favor, ordered the Treasury to pay

additional overpayment interest, and directed the Treasury to pay costs and attorney fees

to plaintiff. The Treasury appealed, and after reconsideration, the Court of Appeals

reversed the trial court on the calculation of overpayment interest, vacated the award of

attorney fees, and remanded to the trial court for further consideration of the attorney

4
fees. Ford Motor Co v Dep’t of Treasury, unpublished opinion per curiam of the Court

of Appeals, issued February 26, 2013 (Docket No. 306820). We granted leave to appeal,

asking the parties to address issues related to the calculation of interest on the refund.

Ford Motor Co v Dep’t of Treasury, 495 Mich 861 (2013).

II. STANDARD OF REVIEW AND RULES OF STATUTORY INTERPRETATION

This case requires interpretation of the Revenue Act. Questions of statutory

interpretation are reviewed de novo. Malpass v Dep’t of Treasury, 494 Mich 237, 245;

833 NW2d 272 (2013). A trial court’s factual findings are reviewed for clear error.

Detroit v Ambassador Bridge Co, 481 Mich 29, 35; 748 NW2d 221 (2008). A factual

finding is clearly erroneous “only when the reviewing court is left with the definite and

firm conviction that a mistake has been made.” Id. (citation omitted).

When interpreting statutes, “our primary task . . . is to discern and give effect to

the intent of the Legislature.” Sun Valley Foods Co v Ward, 460 Mich 230, 236; 596

NW2d 119 (1999) (citations omitted). To accomplish that task, we begin by examining

the language of the statute itself. Id. (citation omitted). “If the language of the statute is

unambiguous, the Legislature must have intended the meaning clearly expressed, and the

statute must be enforced as written.” Id. (citation omitted).

III. ANALYSIS

Prior proceedings established that the Treasury erroneously assessed tax on

plaintiff’s contributions to its VEBA trust fund; thus, the only issue we consider today is

the actions a taxpayer must take to trigger the accumulation of interest on a refund. The

5
Revenue Act, MCL 205.1 et seq., governs refunds of erroneously assessed taxes.

Specifically, MCL 205.30 provides:

(1) The department shall credit or refund . . . taxes . . . erroneously
assessed and collected . . . with interest . . . .

(2) A taxpayer who paid a tax that the taxpayer claims is not due may
petition the department for refund of the amount paid within the time period
specified as the statute of limitations in [MCL 205.27a]. If a tax return
reflects an overpayment . . . the declaration of that fact on the return
constitutes a claim for refund. If the department agrees the claim is valid,
the amount of overpayment, penalties, and interest shall be first applied to
any known liability as provided in [MCL 205.30a] and the excess, if any,
shall be refunded to the taxpayer or credited, at the taxpayer’s request,
against any current or subsequent tax liability. . . .

(3) The department shall certify a refund to the state disbursing
authority who shall pay the amount out of the proceeds of the tax in
accordance with the accounting laws of the state. Interest . . . shall be
added to the refund commencing 45 days after the claim is filed or 45 days
after the date established by law for the filing of the return, whichever is
later. Interest on refunds intercepted and applied as provided in [MCL
205.30a] shall cease as of the date of interception. . . . [Emphasis added.][2]

Thus, the statutory language establishes that, before interest begins accumulating on a tax

refund, a taxpayer must: (1) pay the disputed tax; (2) make a “claim” or “petition;” and

(3) “file” the claim or petition.

A. A TAXPAYER MUST PAY THE DISPUTED TAX

The statutory language provides that the Treasury must credit or refund taxes

“erroneously . . . collected.” MCL 205.30(1) (emphasis added). Additionally,

2
The Legislature amended MCL 205.30 in 2013 and 2014. 2013 PA 133; 2014 PA 3.
Because the trial court decided the issues relevant to this case before the effective dates
of the 2013 and 2014 amendments, we analyze this case under the statutory provisions in
effect at the time of the trial court’s decision.

6
MCL 205.30(2) establishes what a taxpayer “who paid a tax” must do to obtain a refund

“of the amount paid.” Emphasis added. Therefore, the statute makes clear what is

already obvious: in order to seek a tax refund, a taxpayer must first pay the tax at issue.

B. A TAXPAYER MUST “PETITION” FOR OR “CLAIM” A REFUND

If the taxpayer paid the tax, MCL 205.30(2) provides that a taxpayer may make a

“petition” or “claim” for refund. The Revenue Act does not define “petition” or “claim”

as used in MCL 205.30. Therefore, we presume that the Legislature intended for the

words to have their ordinary meaning. MCL 8.3a. To assist in determining the ordinary

meaning of the relevant words, we may consult a dictionary. Klooster v City of

Charlevoix, 488 Mich 289, 304; 795 NW2d 578 (2011) (citation omitted). Relevant

definitions of “claim” include: (1) “[t]o demand as one’s due; assert one’s right to,” (2)

“[a] demand for something as one’s rightful due; affirmation of a right,” The American

Heritage Dictionary of the English Language: New College Edition, (3) “to ask for esp.

as a right,” and (4) “to assert to be rightfully one’s own,” Merriam-Webster’s Collegiate

Dictionary (11th ed). See, also, Black’s Law Dictionary (9th ed) (defining “claim” in

part as “[t]he assertion of an existing right; any right to payment or to an equitable

remedy, even if contingent or provisional ” and “[a] demand for money, property, or a legal remedy to which one asserts

a right . . . .”).

Because the word “petition” is used as a verb within MCL 205.30(2), see The

American Heritage Dictionary of the English Language: New College Edition

7
(explaining that when “petition” is used as a verb, it is “[o]ften followed by for”),3 the

relevant definitions include: (1) “[t]o ask for by petition; request formally,” The

American Heritage Dictionary of the English Language: New College Edition, and (2)

“to make a request to: SOLICIT . . . to make a request; esp : to make a formal written

request,” Merriam-Webster’s Collegiate Dictionary (11th ed). See, also, Muldavin v

Dep’t of Treasury, 184 Mich App 222, 226; 457 NW2d 50 (1990) (holding that under

MCL 205.30(2) “tax overpayment would have to be requested either on a . . . tax return

or by separate petition . . . .”) (emphasis added).

Along with the relevant dictionary definitions, our order in NSK Corp v Dep’t of

Treasury, 481 Mich 884 (2008), provides further insight regarding the proper

interpretation of terms “petition” and “claim” in MCL 205.30. In NSK Corp, the

Treasury conducted an audit and subsequently sent an Audit Determination Letter

informing the taxpayer that the taxpayer had overpaid its taxes.4 The taxpayer responded

to the letter by checking the box indicating that the taxpayer agreed with the Treasury’s

conclusion that a refund was owed in the amount the Treasury stated, but also checked

the box on the letter indicating that the taxpayer disagreed with the Treasury’s

determination. Regarding that disagreement, the taxpayer included a written statement

demanding interest on the refund under MCL 205.30. The Court of Appeals concluded

3
As used in MCL 205.30(2), “petition” is followed by “for:” “A taxpayer who paid a tax
that the taxpayer claims is not due may petition the department for refund . . . .”
Emphasis added.
4
The Audit Determination Letter in NSK Corp was the same as the Audit Determination
Letter that the Treasury sent to plaintiff in this case.

8
that the taxpayer was entitled to interest, and that the triggering date for the 45-day

waiting period under MCL 205.30(3) was the date that the Treasury sent the Audit

Determination Letter to the taxpayer because that was when the Treasury “was aware that

[the taxpayer] was entitled to a refund . . . .” NSK Corp v Dep’t of Treasury, 277 Mich

App 692, 698; 746 NW2d 886 (2008).

We rejected the Court of Appeals’ conclusion with respect to the triggering date

for accumulation of interest and instead held that MCL 205.30(2) “requires that the claim

be one made by the taxpayer seeking a refund either in a tax return or by separate

request.” NSK Corp, 481 Mich at 884 (emphasis added). We concluded that the

taxpayer in NSK Corp did not satisfy that requirement until it “responded . . . to the

Treasury Department’s Audit Determination Letter, agreeing with the amount of the

refund, but demanding interest on the refund.” Id.

Today, we reaffirm our interpretation of the statute in NSK Corp: we conclude that

under MCL 205.30 a taxpayer can make a claim for a refund in the form of a tax return,

as specifically permitted in MCL 205.30(2), or “by separate request.” NSK Corp, 481

Mich at 884. Additionally, considering the relevant definitions of “claim” and “petition,”

we further conclude that a taxpayer is not required to make the claim on a specific

Treasury form or in any other specific manner in order to satisfy MCL 205.30. Rather, a

taxpayer must only “demand” or “request” the refund or “assert[] . . . an existing right” to

the refund. For example, in NSK Corp, the taxpayer responded to the Treasury’s Audit

Determination Letter by adding information to the form and returning it to the Treasury.

9
Because the form, combined with the additional information explicitly demanded a

refund and interest on the refund, it constituted a “claim” for a refund.5

Alternatively, a taxpayer could satisfy the statutory requirement by sending a

separate letter to the Treasury, as long as the letter included the information necessary to

constitute a definite demand for, request for, or assertion of a right to a refund. For

example, the taxpayer in Lindsay Anderson Sagar Trust v Dep’t of Treasury, 204 Mich

App 128, 129; 514 NW2d 514 (1994), “wrote a letter to . . . [the] Treasury requesting a

refund of $156,961, which the [taxpayer] claimed had been erroneously paid.” Emphasis

added. In short, because a taxpayer can demand, request, or assert a right to a refund by a

multitude of methods, we conclude that the taxpayer’s “claim” or “petition” need not take

any specific form, so long as it clearly requests or demands that the Treasury return tax

payments that the taxpayer asserts were not due.

C. THE PETITION OR CLAIM MUST BE “FILED”

Finally, under MCL 205.30(3), interest must only be “added to the refund

commencing 45 days after the claim is file . . . .” Emphasis added. As with the terms

“claim” and “petition,” the Revenue Act does not define “filed.” Therefore, we again

consult the dictionary for guidance in determining the ordinary meaning of the word.

The relevant definitions of “file” include: (1) “to initiate (as a legal action) through

proper formal procedure,” (2) “to submit documents necessary to initiate a legal

5
Although the taxpayer’s claim for a refund in NSK Corp included a demand for interest
on the refund, we clarify that the statutory language only requires a “claim” or a
“petition” for a refund; it does not require a taxpayer to also “claim” or “petition” for
interest itself in order to satisfy the requirements in MCL 205.30.

10
proceeding,” Merriam-Webster’s Collegiate Dictionary (11th ed), (3) “[t]o enter (a legal

document, for example) on public record or official record,” and (4) “[t]o apply: file for a

job,” The American Heritage Dictionary of the English Language: New College Edition.

Applying the definitions of “file” to the statute, we conclude that, in order for a

taxpayer’s “claim” for refund to trigger the 45-day waiting period in MCL 205.30(3), the

taxpayer must “submit” the claim to the Treasury. The clear goal of “filing” the claim is

to inform the Treasury that the taxpayer believes that the taxpayer is entitled to a refund.

Indeed, the relevant dictionary definitions of “file” seem to imply that the purpose of the

act of “filing” is to inform or notify others of something, whether it is the filer’s intent to

initiate a legal action, apply for a job, or engage in some other activity. Accordingly, as

the Court of Appeals stated in Sagar Trust, 204 Mich App at 132, “a claim [for a refund]

is filed when [the Treasury] receives adequate notice of the claim.” Emphasis added.

Indeed, if a taxpayer desires to obtain a refund and seeks to achieve that goal by making a

“claim” or “petition” for the refund, logic requires that the taxpayer must notify the

Treasury of the taxpayer’s belief that it is entitled to a refund. Otherwise, the only entity

that can grant the taxpayer’s claim for a refund—the Treasury—will remain unaware that

the taxpayer seeks a refund.

Likewise, interpreting the word “file” in MCL 205.30(3) as requiring a taxpayer to

provide the Treasury with adequate notice of the taxpayer’s claim or petition for a refund

is consistent with the purpose of the 45-day waiting period between submission of the

claim or petition and the start of interest accumulation on the refund. Specifically,

MCL 205.30(2) states that a refund shall be paid “[i]f the [Treasury] department agrees

that the claim is valid . . . .” Emphasis added. Therefore, MCL 205.30(3) creates a 45-

11
day waiting period so that the Treasury can investigate the taxpayer’s claim for a refund

and determine its validity before interest begins accumulating. In order to give effect to

the legislative intent regarding the 45-day waiting period, the Treasury must be permitted

to investigate the claim, and, in order to investigate the claim, the Treasury must have

adequate notice of the claim, as the Court of Appeals held in Sagar Trust.

In summary, when the statute is read as a whole it is clear that, in order to trigger

the 45-day waiting period before interest begins to accrue on a tax refund, a taxpayer

must (1) have actually paid the tax at issue; (2) make a “petition . . . for” a refund or

“claim for refund” by demanding, requesting, or asserting a right to a refund of tax

payments that the taxpayer made to the Treasury return that the taxpayer asserts are not

due; and (3) “file” the claim or petition by submitting it to the Treasury, thereby

providing the Treasury with adequate notice of the taxpayer’s claim for a refund.

IV. APPLICATION

Applying the above framework to this case, we must first determine when plaintiff

paid the disputed tax, because plaintiff could not “claim” or “petition” for a refund until

after the disputed tax was paid. The record reflects that plaintiff kept unassigned funds

on deposit with the Treasury and that plaintiff could assign those funds to its tax

liabilities by directing the Treasury to apply the funds to specific tax liabilities. As

relevant to this case, the record reflects that plaintiff had funds on deposit with the

Treasury sufficient to pay the disputed tax liability no later than October 31, 2002, and

that the Treasury acknowledged that plaintiff directed the Treasury to apply those funds

to the disputed tax liability. In addition, during an October 6, 2011 hearing, the trial court

12
concluded that plaintiff had paid the disputed tax liability no later than October 31, 2002.

Because the trial court’s conclusion is supported by record evidence, we are not left with

a definite and firm conviction that a mistake was made. Therefore, plaintiff satisfied the

first requirement for obtaining a refund—paying the disputed tax—no later than

October 31, 2002.

Next, we must determine whether plaintiff made a “claim” or “petition” for a

refund. Plaintiff argues that it made a claim or petition for refund on August 3, 2005,

when it responded to the Treasury’s Audit Determination Letter by checking the box

indicating that plaintiff “disagrees with this determination.” Specifically, plaintiff

contends that its expression of disagreement on August 3, 2005, coupled with the other

information known to the Treasury as a result of the audit process, constitutes a claim or

petition for refund.6 Thus, the question is whether, when considered in context with the

information known to the Treasury, expressing disagreement with the Treasury’s tax

assessment is sufficient to constitute a claim or petition for refund of the money

associated with that determination.

To begin with, there is no dispute that plaintiff made clear its disagreement with

the Treasury’s audit determination regarding the taxability of the VEBA contributions

6
Plaintiff argues that the Treasury knew that plaintiff (1) had filed returns stating the
amount of tax plaintiff believed was due, (2) did not treat the VEBA contributions as
taxable, (3) disagreed with the Treasury’s conclusion that the VEBA contributions were
taxable, and (4) had made previous payments sufficient to cover the disputed tax liability.
Plaintiff also notes that, in a September 19, 2005 letter, the Treasury acknowledged that it
was aware of plaintiff’s disagreement with the tax assessment and argument regarding the
VEBA contributions and encouraged plaintiff to pursue legal remedies.

13
and that subsequent court proceedings eventually proved plaintiff correct. Additionally,

there may be some appeal to the seemingly logical conclusion that a taxpayer who

expresses disagreement with a tax assessment is also likely to request a refund of funds

paid to satisfy the disputed assessment. However logical that conclusion may appear, the

statutory language nevertheless requires more of a taxpayer: the taxpayer must make a

claim or petition for a refund, which, as we previously established, requires the taxpayer

to explicitly demand, request, or assert a right to a refund. Although expressing

disagreement with a tax assessment may imply that the taxpayer may seek a refund, an

expression of disagreement alone is not a demand for, request for, or assertion of a right

to a refund.

Indeed, although we approached the issue from the opposite direction in NSK

Corp because in that case the Treasury determined that the taxpayer was entitled to a

refund, we nevertheless reached the same conclusion. Specifically, we held that the 45-

day waiting period before interest begins to accrue on a tax refund is not triggered merely

because the Treasury is aware that the taxpayer is entitled to a refund. Although it is

seemingly logical that a taxpayer entitled to a refund will indeed request that refund, we

nevertheless concluded that the statutory language requires something more: the taxpayer

must make a “separate request” for the refund. NSK Corp, 481 Mich at 884. Therefore,

if the Treasury’s actual knowledge that a taxpayer is entitled to a refund is not sufficient

to trigger the 45-day waiting period under MCL 205.30(3), a taxpayer’s mere expression

of disagreement with a tax assessment cannot constitute a claim or petition for a refund

sufficient to trigger the interest waiting period. Rather, the taxpayer must make a

“separate request” that clearly demands, requests, or asserts a right to a refund. Because

14
plaintiff’s August 3, 2005 response to the Audit Determination Letter did not make such

a demand, request, or assertion, it was not a “claim” for a refund under MCL 205.30.

We also asked the parties to address whether plaintiff’s November 17, 2005

request for an informal conference with the Treasury constituted a claim or petition for

refund under MCL 205.30. Although a request for an informal conference could

potentially constitute a claim or petition for a refund under the statutory language if the

request includes a demand or request for or an assertion of a right to a refund, we

conclude that plaintiff’s request for an informal conference in this case did not make such

a demand, request, or assertion.

First, nowhere in the request for an informal conference did plaintiff expressly

demand, request, or assert a right to a refund of the VEBA-contribution tax that plaintiff

paid. Rather, the request for an informal conference only expressed plaintiff’s

disagreement with the result of the Treasury’s audit. In fact, the request for an informal

conference stated that plaintiff “will be working with the [Treasury’s] audit team to

narrow the issues in dispute.” Therefore, plaintiff’s request for an informal conference

seems to indicate that plaintiff believed that the disagreement could be resolved by

further negotiations between the parties rather than a claim or petition for refund.

Second, plaintiff’s request for an informal conference listed “the most material items”

with which plaintiff disagreed, which included issues that do not form the basis for

plaintiff’s refund associated with its VEBA contributions. Therefore, because the request

for an informal conference addressed multiple issues, it did not indicate that plaintiff

sought a refund for the tax associated with the VEBA contribution. Rather, the request

for an informal conference merely listed multiple points of disagreement. Accordingly,

15
we conclude that the request for an informal conference was not a claim or petition for

refund for purposes of MCL 205.30.

Next, we consider whether plaintiff’s August 25, 2006 letter to the Treasury

constituted a claim or petition for refund under MCL 205.30. The August 25, 2006 letter

withdrew plaintiff’s request for an informal conference and informed the Treasury that

plaintiff would file an action in the Court of Claims. The letter stated that plaintiff’s prior

payment of the tax assessment associated with plaintiff’s VEBA contributions “should be

viewed as a payment under protest within the meaning of MCL 205.22.”

Although a taxpayer need not file a lawsuit under MCL 205.22 in order to make a

“claim” or “petition” for a refund, we conclude that the reference to this statute in

plaintiff’s August 25, 2006 letter constituted a claim or petition for refund under

MCL 205.30. By referring to MCL 205.22 in expressing plaintiff’s decision to institute a

formal legal action in a court of law, the August 25, 2006 letter indicated that plaintiff

was at that time “claim[ing] a refund” as distinctly contemplated by MCL 205.22.7 In

other words, by notifying the Treasury that plaintiff would resolve the dispute in the

Court of Claims pursuant to MCL 205.22, the August 25, 2006 letter asserted a right to a

refund by affirmatively notifying the Treasury that plaintiff was making what

MCL 205.22 itself terms a “claim” for refund.8 Therefore, plaintiff’s August 25, 2006

7
Specifically, under MCL 205.22(2), in order to pursue an appeal to the Court of Claims,
plaintiff was required to “first pay the tax, including any applicable penalties and interest,
under protest and claim a refund as part of the appeal.” MCL 205.22(2) (emphasis
added).
8
The dissent accurately concludes that MCL 205.22(2) imposes two requirements that a
taxpayer must satisfy in order to appeal a tax assessment in the Court of Claims: a

16
letter satisfied the second requirement necessary to trigger the 45-day waiting period

before interest begins to accrue under MCL 205.30: plaintiff made a “claim” or “petition”

by informing the Treasury that it intended to file suit in the Court of Claims pursuant to

the procedures delineated in MCL 205.22.

Finally, we must determine whether plaintiff’s August 25, 2006 letter satisfied the

requirement that the claim or petition for refund of the amount paid be “filed.” As

previously discussed, in order to “file” the claim, a taxpayer must provide the Treasury

with adequate notice by “submit[ting]” the claim to the Treasury. The August 25, 2006

letter satisfied that requirement because plaintiff mailed the letter to the Treasury, and, as

taxpayer must pay the disputed tax under protest and claim a refund as part of the appeal
to the Court of Claims. The dissent also correctly concludes that a taxpayer may pay the
disputed tax “under protest” and “claim a refund as part of the appeal” in a single action.
In fact, the dissent expressly agrees that plaintiff could satisfy both the requirement to
pay under protest and the requirement to claim a refund in a single letter.

Thus, our only disagreement with the dissent arises from our interpretation of plaintiff’s
August 25, 2006 letter: we interpret plaintiff’s August 25, 2006 letter to do precisely what
the dissent correctly recognizes is permissible. First, plaintiff informed the Treasury that
it was paying the disputed VEBA contribution tax assessment “under protest,” a
conclusion with which the dissent agrees. Second, we conclude that by informing the
Treasury that plaintiff would file an action in the Court of Claims and referring to MCL
205.22, plaintiff asserted a right to a refund, which, as previously discussed, constitutes a
claim or petition for a refund under MCL 205.30. Accordingly, contrary to the dissent’s
contention, we do not merely treat plaintiff “as if” it made a claim or petition in its
August 25, 2006 letter—plaintiff actually did so by affirmatively notifying the Treasury
that it was asserting its right to a refund by undertaking formal legal action. The fact that
plaintiff again claimed a refund in its complaint does not preclude the August 25, 2006
letter from constituting a claim or petition for a refund as required by MCL 205.30. To
conclude otherwise would require a taxpayer to use the magic words “refund” and
“claim” or “petition” in order to satisfy MCL 205.30, which would be inconsistent with
our prior conclusion that a taxpayer’s “claim” or “petition” need not take any specific
form, a conclusion with which the dissent agrees.

17
evidenced by the Treasury’s responsive letter dated September 15, 2006, the Treasury

received it. See Sagar Trust, 204 Mich App at 132 (holding that the Treasury had

adequate notice of the taxpayer’s claim and the claim was therefore “filed” on the date

that the taxpayer submitted a letter requesting a refund). Accordingly, all the

requirements of MCL 205.30 were satisfied on August 25, 2006, and pursuant to MCL

205.30(3), interest began accruing on the refund 45 days later, on October 9, 2006.

V. CONCLUSION

We hold that, in order to satisfy the requirements of MCL 205.30 and trigger the

45-day waiting period before interest begins to accrue on a tax return, a taxpayer must (1)

pay the disputed tax, (2) make a “claim” or “petition,” and (3) “file” the claim or petition.

Although a “claim” or “petition” need not take any specific form, it must clearly demand,

request, or assert a right to a refund. In order to “file” the claim or petition, a taxpayer

must submit the claim to the Treasury, thereby providing the Treasury with adequate

notice of the taxpayer’s claim.

Because the Court of Appeals erroneously concluded that plaintiff did not satisfy

the requirements of MCL 205.30 until it filed its complaint in the Court of Claims on

December 13, 2006, we reverse the judgment of the Court of Appeals in part and instead

hold that plaintiff satisfied all of the statutory requirements on August 25, 2006. We

remand to the trial court for further consideration of the attorney-fee issue. We do not

retain jurisdiction.

Michael F. Cavanagh
Mary Beth Kelly
Brian K. Zahra
Bridget M. McCormack

18
STATE OF MICHIGAN

SUPREME COURT

FORD MOTOR COMPANY,

Plaintiff-Appellant,

v No. 146962

DEPARTMENT OF TREASURY,

Defendant-Appellee.

MARKMAN, J. (concurring in part and dissenting in part).

I concur with the majority’s analysis of the law in Part III of the opinion.

However, I write separately because I do not believe the majority properly applies its

own test in concluding that plaintiff’s August 25, 2006 letter to the Department of

Treasury satisfied the statutory requirements of MCL 205.30. Specifically, I disagree

with its conclusion that, by virtue of this letter, “plaintiff made a ‘claim’ or ‘petition’ [for

a tax refund] by informing the Treasury that it intended to file suit in the Court of Claims

pursuant to the procedures delineated in MCL 205.22.” Therefore, I respectfully dissent

from that portion of the opinion. I would instead affirm the result of the Court of Appeals

and hold that plaintiff did not satisfy the requirements of MCL 205.30 until it actually

filed its complaint in the Court of Claims on December 13, 2006.

The instant appeal stems from an earlier dispute regarding whether plaintiff Ford

Motor Company owed tax under the Single Business Tax Act (SBT) relating to its

contributions to its Voluntary Employees’ Beneficiary Association (VEBA) trust fund for

the tax years 1997 through 2001. After auditing plaintiff, the Department of Treasury
concluded that VEBA contributions were taxable and assessed taxes accordingly.

Although plaintiff repeatedly disagreed with the department’s conclusion that VEBA

contributions were taxable, and therefore disagreed with the amount that the audit

determined it owed, plaintiff eventually paid the amount assessed by the department

“under protest” with funds that were at that time being held on deposit by the department.

Plaintiff subsequently challenged the taxability of VEBA contributions, and the Court of

Appeals ultimately held that these were not taxable under the SBT, meaning that plaintiff

was due a refund. Ford Motor Co v Dep’t of Treasury, 288 Mich App 491; 794 NW2d

357 (2010), lv den 488 Mich 1026 (2011). The issue for purposes of this appeal concerns

the proper amount of this refund, as the parties disagree about the date on which plaintiff

filed its claim for a refund and thus triggered interest on the refund under MCL 205.30.

MCL 205.30 provides:

(1) The department shall credit or refund . . . taxes . . . erroneously
assessed and collected . . . with interest . . . .

2
[MCL 205.30a] shall cease as of the date of interception . . . . [Emphasis
added.]
The majority appropriately concludes that, in order to trigger the accrual of overpayment

interest under this statute, a taxpayer must: “(1) “pay” the disputed tax, (2) make a

“claim” or “petition” for a refund, and (3) “file” the claim or petition.”1

To satisfy the second requirement of this test, the majority concludes that plaintiff

made a “claim or petition” for a refund in an August 25, 2006 letter sent to the

department. That letter informed the department that plaintiff no longer wished to

proceed with an informal conference that had previously been scheduled, that it would

file an action in the Court of Claims asserting that VEBA contributions were not taxable,

and that plaintiff was paying the assessed tax on its VEBA contributions “under protest

within the meaning of MCL 205.22.”2 However, this letter cannot be best understood as

constituting a “claim or petition” for a refund for purposes of MCL 205.30, quite simply

because it nowhere “claims or petitions” any right to a refund. That is, while the letter

did request that the audit deficiency be satisfied with funds held “on deposit,” and that

1
The majority, not unreasonably, relies on dictionary definitions to conclude that to make
a “claim” or “petition” for a refund, a taxpayer must “demand, request, or assert” such a
right. While I do not quarrel with these definitions, as I agree it is useful in the course of
interpretation to examine the ordinary meanings of terms used in a statute, I believe that
the words actually chosen by the Legislature-- “claim” and “petition”-- are sufficiently
clear to render unnecessary repeated references to their synonyms.
2
Specifically, the letter stated “[i]t is our intent to withdraw our case from Informal
Conference and file an action with the Court of Claims on the unresolved issues.
Therefore, we are requesting that the audit deficiency, together with the applicable
interest, be satisfied with the amounts currently being held by the Department ‘on
deposit.’ The application of the amounts on deposit to the audit deficiencies should be
viewed as a payment under protest within the meaning of MCL 205.22.”

3
this be viewed as a “payment under protest,” plaintiff (a) nowhere asked for its money

back; (b) nowhere made any apparent demand that the department return funds that

rightfully belonged to plaintiff; (c) nowhere asserted that it believed it was entitled to a

refund; and (d) nowhere even alluded to, or referred to, a refund. While the letter may

well imply that plaintiff intended to seek a refund-- as it might logically follow that any

taxpayer who “pays under protest” desires the return of his or her payments-- by the

majority’s own language, a mere “implication” does not satisfy the requirement that the

taxpayer “claim or petition” for a refund. Ante at 14 (“Although expressing disagreement

with a tax assessment may imply that the taxpayer may seek a refund, an expression of

disagreement alone is not a demand for, request for, or assertion of a right to a refund.”).

The requirements set forth in MCL 205.30 are not complicated; a taxpayer either makes

the “claim or petition” for a refund, or it does not. It is not up to the department to

attempt to read the taxpayer’s mind, or to parse the taxpayer’s language and actions with

a fine comb, or to assess the totality of surrounding circumstances in order to surmise

what was within the taxpayer’s contemplation. If there is a “claim or petition” (a

“demand, request, or assertion”) for a refund, the taxpayer has satisfied the statute; if

there is not, the taxpayer has not. The law could not be more clear or more

straightforward. Given plaintiff’s failure in any way to make a “claim or petition” for a

refund in its August 25, 2006 letter, I find the conclusion inescapable that it did not

satisfy the second requirement of the statute on that date.

To support its contrary conclusion, the majority relies on plaintiff’s invocation of

MCL 205.22 in its letter. This provision specifies that, “[i]n an appeal to the court of

claims, the appellant shall first pay the tax, including any applicable penalties and

4
interest, under protest and claim a refund as part of the appeal.” [Emphasis added.]

According to the majority, because MCL 205.22 itself requires a claim for a refund,

plaintiff’s reference to this statute satisfied the “claim or petition” requirement of

MCL 205.30, as such reference “affirmatively notif[ied] the Treasury that plaintiff was

making what MCL 205.22 itself terms a ‘claim’ for refund.” However, even if a taxpayer

could affirmatively assert a “claim or petition” for a refund by referring to another

statute, plaintiff did not do so by making a “payment under protest” while invoking MCL

205.22. This is because MCL 205.22 clearly differentiates between a payment under

protest and a claim for a refund. That is, the taxpayer must first “pay the tax . . . under

protest,” and then, secondly, “claim a refund as part of the appeal.” MCL 205.22(2). By

concluding that the August 25, 2006 letter constituted a claim for a refund on the basis of

the invocation of MCL 205.22, the majority conflates these two distinct statutory

requirements. If plaintiff’s payment under protest itself constituted the claim for a refund

for purposes of MCL 205.30, the second requirement of MCL 205.22-- that there be a

“claim [of] a refund”-- would be rendered utterly meaningless in contravention of the rule

that “[i]n interpreting a statute, we [must] avoid a construction that would render part of

the statute surplusage or nugatory.” People v McGraw, 484 Mich 120, 126; 771 NW2d

655 (2009). The majority also fails to recognize that because MCL 205.22(2) states that a

claim must be made “as part of the appeal” following the payment under protest, when

plaintiff stated that it was paying “under protest within the meaning of MCL 205.22,” the

department had every reason based on the language of the statute to believe that the

5
August 25, 2006 letter was not a claim for a refund, but that the claim would be

forthcoming as part of the appeal.3 In short, the majority treats plaintiff as if it had made

a “claim or petition” for a refund in its August 25, 2006 letter, when it did not actually do

so, based exclusively on plaintiff’s invocation of a statute that itself logically suggests

that plaintiff had yet to make such a “claim or petition.”4

By concluding that the August 25, 2006 letter constituted a “claim or petition” for

a refund for purposes of MCL 205.30, the majority injects unnecessary uncertainty into

its own test by suggesting to future taxpayers that they need not make an actual “claim or

petition” for a refund to trigger the accrual of interest under MCL 205.30, but that some

uncertain aggregation of other statements and actions might suffice if they come “close

3
Because the August 25, 2006 letter did not itself claim or petition for a refund, but
indicated only that plaintiff intended prospectively to file a lawsuit to pursue unresolved
issues, the majority holds that the department should have acted not on an extant “claim
or petition” for a refund, but on a mere intimation of what plaintiff later intended to do.
4
We agree with the majority that a taxpayer may pay the disputed tax “under protest” and
make a “claim or petition” for a refund in a “single action.” Consistent with the
majority’s conclusion that the claim for a refund need not take any specific form, nothing
precluded plaintiff from making a claim for a refund in the August 25, 2006 letter, in
addition to its invocation of MCL 205.22. Indeed, plaintiff could without difficulty have
made a “claim or petition” for a refund in the very same sentence as its payment under
protest by including some type of a “demand, request, or assertion” of a right to a refund.
Nothing in the statute prohibits such a “dual purpose” letter. However, given the absence
of such a “claim or petition” in the letter, the department did not act unreasonably in its
assumption that, consistent with MCL 205.22, plaintiff’s claim would be forthcoming.
Consequently, our conclusion that plaintiff’s August 25, 2006 letter did not itself
constitute a “claim or petition” for a refund does not “require a taxpayer to use the magic
words ‘refund’ and ‘claim’ or ‘petition’ in order to satisfy MCL 205.30,” but only
requires a taxpayer to make some form of the very “petition or claim” (“demand, request,
or assertion”) required by the majority itself. No “magic words” are necessary, but a
communication of the type described by the statute is necessary.

6
enough” to constituting a “claim or petition.” After all, if plaintiff’s failure to actually

“claim or petition” is to be disregarded, its actions effectively will establish a new

threshold for satisfying MCL 205.30, and it will not be at all surprising when the next

taxpayer’s actions which approximate, but fall slightly short of actual compliance with

this new threshold, are also viewed as being “close enough” to satisfy MCL 205.30.

Because I agree with the majority’s analysis that in order to trigger the accrual of

interest for purposes of MCL 205.30 a taxpayer must “make a “claim” or “petition” for a

refund,” I concur in Part III of the majority opinion; however, because I disagree with the

majority that plaintiff made such a “claim or petition” in its August 25, 2006 letter, I

dissent from that portion of Part IV of the majority opinion. I would instead hold that

plaintiff satisfied the requirements of MCL 205.30 when it filed its complaint, which

included a claim for a refund, in the Court of Claims on December 13, 2006. In that

document, plaintiff asked the court to “order a refund in excess of $12,323,625 for the

Single Business Taxes paid under protest by Ford . . . .” Accord NSK Corp v Dep’t of

Treasury, 481 Mich 884 (2008) (taxpayer made a claim for a refund for purposes of MCL

205.30, not when department knew that taxpayer was entitled to a refund, but only when

taxpayer made an affirmative request for such refund). Therefore, I would affirm the

result of the Court of Appeals for the reasons stated in Part III of the majority opinion and

in this dissent.

Stephen J. Markman
Robert P. Young, Jr.
David F. Viviano

Ford Motor Company v. Department of Treasury

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