Denton v. Dep't of Treasury

317 Mich.App. 303

894 N.W.2d 694

DENTON

v.DEPARTMENT OF TREASURY.

Docket No. 327406.

Court of Appeals of Michigan.

Submitted July 13, 2016, at Lansing.

Decided Sept. 20, 2016, at 9:00 a.m.

Howard & Howard Attorneys PLLC, Ann Arbor (by Bradley J. Knickerbocker ) for petitioners.

Bill Schuette, Attorney General, Aaron D. Lindstrom, Solicitor General, Matthew Schneider, Chief Legal Counsel, and Adam P. Sadowski, Assistant Attorney General, for respondent.

Before: STEPHENS, P.J., and SERVITTO and GLEICHER, JJ.

STEPHENS, P.J.

Petitioners appeal as of right the final opinion and judgment of the Michigan Tax Tribunal (MTT) denying their request to waive the interest assessed against them on a corrected tax bill issued after respondent determined that petitioners improperly claimed a principal residence exemption (PRE)¹ for tax years 2010 through 2013. For the reasons discussed in this opinion, we reverse the MTT's judgment and remand this case to respondent for further proceedings.

I. BACKGROUND

Petitioners, Leet and Patsy Denton, once resided in Grosse Pointe Shores, Michigan. At some point, petitioners moved to Florida, and they applied for a homestead exemption there in 2007. Petitioners were required to submit an "Other County/State Benefit Cancellation Form" to a Florida county property appraiser to show that the PRE for their Michigan home was cancelled. The form gave notice of petitioners' homestead exemption application in Florida and requested that the appropriate assessor in Michigan remove "residency based" exemptions or benefits for the Grosse Pointe Shores home for the 2007 tax year.

In December 2007, the Michigan tax assessor for Lake Township signed the form without specifying what benefits or exemptions were cancelled. In any event, the form was accepted by the county office in Florida, and petitioners were thereafter granted a Florida homestead exemption.

The Michigan assessor did not remove the PRE for petitioners' Grosse Pointe Shores' home however, and in September 2013, after an audit, respondent informed petitioners that it was denying PRE exemptions for the years 2010 through 2013 because the property was not being occupied as a principal residence.² Petitioners were assessed back taxes and interest in the matter, which apparently they paid. In February 2013, the local tax assessor in Michigan,³ at petitioners' behest, filed Department of Treasury Form 4813, titled "Assessor's Affidavit to Waive Principal Residence Exemption (PRE) Denial Interest," and requested that respondent waive $18,521.49 in interest.⁴ In that form, the assessor identified "an assessor's failure to rescind the exemption after the owner requested, in writing, that the exemption be rescinded" as the error occasioning the corrected tax bill. The form provided the following instruction for when that error was asserted:

If the corrected or supplemental tax bill(s) was a result of an assessor's failure to rescind the exemption after the owner requested in writing that the exemption be rescinded, the error must be thoroughly detailed in this section. Copies of an appropriately date-stamped Request to Rescind Homeowner's Principal Residence Exemption, Form 2602, or other similar request to rescind the exemption must be submitted with this Affidavit. [Emphasis added.]

Attached to the tax assessor's affidavit was the 2007 Florida "Other County/State Benefit Cancellation Form."

In a letter dated May 22, 2014, respondent informed petitioners that their interest waiver request was denied because "insufficient documentation was submitted to show that an assessor's error occurred as required by MCL 211.7cc(8)." In June 2014, petitioners filed a petition in the Small Claims Division of the MTT, appealing respondent's decision and asserting that respondent was provided with all the necessary information and that there was "no doubt that a written request to rescind the PRE was made by the Petitioners in 2007 as required by MCL 211.7cc(8)." Attached to the petition was an affidavit from the tax assessor who in 2007 received the Florida homestead exemption form from petitioners. The assessor averred that he "thought [he] had taken the appropriate steps to adjust the Village records so as to rescind the Personal [sic] Residence Exemption" on petitioners' Grosse Pointe Shores property near the time he received the 2007 Florida form. The assessor also averred that he "did not ask (or suggest) that [petitioners] complete a Michigan [Department of] Treasury form 2602 as [he] already had the Florida Certification which included a written request to rescind their Personal Residence Exemption." In its answer, respondent argued that petitioners were required to seek rescission of the PRE by filing Form 2602 and that "[a]n assessor does not have the authority to rescind an exemption where a request to rescind the exemption has not been filed." Respondent thus maintained that no assessor error had occurred under MCL 211.7cc(8).

Following a hearing on January 14, 2015, an MTT hearing referee issued a proposed opinion and judgment. The referee agreed with respondent that an assessor did not have authority to rescind a PRE when Form 2602 was not filed. It noted that MCL 211.7cc(8) allows for requests to be made "in writing" but concluded that respondent properly exercised its discretion under that subsection in denying the request.

Petitioners filed exceptions to the proposed opinion and judgment and argued that the referee's reading of MCL 211.7cc(8) would render the statute meaningless as applied to interest waivers given that MCL 211.7cc(15) precludes the assessment of interest when Form 2602 is timely filed and the assessor fails to remove the PRE. Petitioners contended that respondent's position—that respondent was prevented from considering a request to rescind when Form 2602 was not filed—constituted a failure to exercise any discretion.

In its final opinion and judgment, the MTT rejected petitioners' argument, noting that MCL 211.7cc(8) remained applicable to untimely filed rescission forms. The MTT also rejected petitioners' argument that respondent abused its discretion by failing to exercise any discretion in the matter.

Petitioners sought reconsideration on April 3, 2015. Again, petitioners argued that the MTT incorrectly interpreted MCL 211.7cc(8). In denying petitioners' motion, the MTT clarified that its final opinion "held that a waiver request based on an assessor's failure to rescind is limited to requests resulting from the filing of a proper rescission form." It also stated that respondent "properly exercised its discretion in determining that the assessor did not fail to rescind the PRE for the tax years at issue as no proper rescission form had been filed."

II. STANDARD OF REVIEW

"In the absence of fraud, error of law or the adoption of wrong principles, no appeal may be taken to any court from any final agency provided for the administration of property tax laws from any decision relating to valuation or allocation." Const. 1963, art. 6, § 28. "[W]hen statutory interpretation is involved, this Court reviews the Tax Tribunal's decision de novo." Briggs Tax Serv., LLC v. Detroit Pub. Sch., 485 Mich. 69, 75, 780 N.W.2d 753 (2010).

"While we recognize that tax exemptions are strictly construed against the taxpayer because exemptions represent the antithesis of tax equality, we interpret statutory language according to common and approved usage, unless such construction is inconsistent with the manifest intent of the Legislature." Elias Bros. Restaurants, Inc. v. Dep't of Treasury, 452 Mich. 144, 150, 549 N.W.2d 837 (1996). "The primary goal of statutory interpretation is to give effect to the intent of the Legislature." Briggs Tax Serv., 485 Mich. at 76, 780 N.W.2d 753. "The words contained in a statute provide the most reliable evidence of the Legislature's intent."

Gillie v. Genesee Co. Treasurer, 277 Mich.App. 333, 345, 745 N.W.2d 137 (2007). "If the language of a statute is clear and unambiguous, the statute must be enforced as written and no further judicial construction is permitted." Whitman v. City of Burton, 493 Mich. 303, 311, 831 N.W.2d 223 (2013). However, "[t]ax laws generally will not be extended in scope by implication or forced construction, and when there is doubt, tax laws are to be construed against the government." LaBelle Mgt., Inc. v. Dep't of Treasury, 315 Mich.App. 23, 29, 888 N.W.2d 260 (2016).

III. ANALYSIS

Michigan's PRE is governed by MCL 211.7cc and MCL 211.7dd of the General Property Tax Act (GPTA), MCL 211.1 et seq.

EldenBrady v. Albion, 294 Mich.App. 251, 256, 816 N.W.2d 449 (2011). While the factual backdrop here is one of a rescission of a PRE, the gravamen of this case is the meaning of the expression "in writing" as used in MCL 211.7cc(8) :

The department of treasury may waive interest on any tax set forth in a corrected or supplemental tax bill for the current tax year and the immediately preceding 3 tax years if the assessor of the local tax collecting unit files with the department of treasury a sworn affidavit in a form prescribed by the department of treasury stating that the tax set forth in the corrected or supplemental tax bill is a result of the assessor's classification error or other error or the assessor's failure to rescind the exemption after the owner requested in writing that the exemption be rescinded. [Emphasis added.]

Respondent contends that "in writing" means, specifically, to use Michigan Department of Treasury Form 2602. Petitioners contend that "in writing" means a written request. The MTT agreed with respondent. We conclude that "in writing" is not synonymous with filing Form 2602 and that the MTT committed an error of law in its interpretation of the expression in MCL 211. 7cc(8).

In support of its interpretation, respondent relies on MCL 211.7cc(5). That subsection provides, in pertinent part:

Except as otherwise provided in this subsection, not more than 90 days after exempted property is no

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