Respondent Department of Treasury appeals as of right from a Michigan Tax Tribunal judgment holding that certain fees collected by petitioner Credit Acceptance Corporation do not constitute “gross receipts” under § 7 of the Single Business Tax Act, MCL 208.7; MSA 7.558(7). We reverse.
The facts are not in dispute. Petitioner’s business involves the collection of money due under installment sales contracts executed between automobile dealerships and automobile purchasers. Petitioner’s relationship with its automobile dealer customers is set forth in a uniform servicing agreement contract into which petitioner enters with each dealer. This contract characterizes petitioner as the “servicing agent” to collect sums owed by the automobile purchaser to the dealership. In exchange, petitioner is entitled to retain as its “servicing fee” twenty percent of all collections. The parties agree that the twenty percent servicing fee constitutes gross business receipts to petitioner and is accordingly subject to single business tax.
The servicing agreement between petitioner and its dealer-customers also provides that when automobile payments become delinquent, petitioner, “on behalf of the dealers . . . shall use reasonable efforts to repossess . . . and sell or otherwise liquidate the Financed Vehicle.” In addition to its twenty percent “servicing fee,” petitioner is authorized under the contract to “reimburse” itself for all collection costs expended by it in repossessing and reselling automobiles as necessary to collect defaulted debt.
The issue in this case is whether “reimbursement” to petitioner of repossession costs constitutes gross *481business receipts includable within its tax base under MCL 208.7; MSA 7.558(7).
MCL 208.7; MSA 7.558(7) defines “sale” and “gross receipts” for purposes of the single business tax as follows:
(I) “Sale” or “sales” means the gross receipts arising from a transaction or transactions in which gross receipts constitute consideration: . . . (b) for the performance of services, which constitute business activities ....
(3) “Gross receipts” means the sum of sales, as defined in subsection (1), and rental or lease receipts. Gross receipts does not include the amounts received in an agency or other representative capacity, solely on behalf of another or others but not including amounts received by persons having the power or authority to expend or otherwise appropriate such amounts in payment for or in consideration of sales or services made or rendered by themselves or by others acting under their direction and control....
In Stratton-Cheeseman Management Co v Dep’t of Treasury, 159 Mich App 719, 725; 407 NW2d 398 (1987), this Court held that the “definition [of gross receipts] clearly excludes from gross receipts the amount received by a taxpayer solely in an agency or representative capacity, while including amounts received as consideration for the performance of personal services.”
We conclude that the “reimbursement” in this case constitutes consideration for the performance of personal services. Article II of the servicing agreement requires the automobile dealer to transfer retail installment sales contracts to petitioner “for administration, servicing and collection.” The dealer’s security interest in the financed vehicle is assigned to peti*482tioner, and petitioner’s name is placed as lienholder on all titles to financed vehicles. If any payments on an installment sales contract are made to the dealer after the contract has been transferred to petitioner, these payments must be forwarded by the dealer to petitioner. In the event an automobile purchaser defaults under a contract, petitioner is free to repossess and sell the financed vehicle, following such “procedures as it deems necessary or advisable.” Petitioner is granted a security interest in “all [rjeceivables now or hereafter transferred to [petitioner] pursuant to this Agreement . . . together with all proceeds.”
The consideration petitioner pays to its dealer-customers for their present transfer of the installment sales contracts and associated security interests is petitioner’s promise to pay eighty percent of the amounts subsequently collected or received on each contract to the originating dealer, net of all collection costs, which include those associated with repossession and sale of defaulted collateral.
In short, for all practical purposes, upon transfer of the retail installment sales contract to petitioner, petitioner becomes the contract holder, with all the incidents of a creditor under the contract, including a security interest in the financed vehicle, and all the incidents of ownership of the debt and of security for its payment. The sums petitioner subsequently collects are for its own account rather than as an “agent” for the dealer.
This Court reviews the decision of the Tax Tribunal to determine whether the tribunal made an error of law or adopted a wrong legal principle. Schubert v Dep’t of Treasury, 212 Mich App 555, 558; 538 NW2d *483447 (1995). The Tax Tribunal in this case applied improper principles of contract law when it classified the relationship established by the servicing agreement between petitioner and its dealer-customers. The agreement was in fact a sales contract and not an agency agreement.
The repossession costs at issue here are funds expended by petitioner to foreclose on collateral for payment of a debt owned by petitioner pursuant to prior transfer from a dealer-customer. Amounts retained by petitioner for these repossession costs, whether they are referred to by the parties as “reimbursement” or not, constitute consideration received by petitioner for the repossession and sale of collateral, and accordingly constitute a portion of petitioner’s gross receipts just as does petitioner’s twenty percent fee.
Reversed.
Bandstra, J., concurred.