Sixarp, LLC v. Twp. of Byron

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SIXARP, LLC, doing business as PRAXIS PACKAGING SOLUTIONS, Petitioner-Appellant, v. TOWNSHIP OF BYRON, Respondent-Appellee.

No. 361888

Court of Appeals of Michigan

August 22, 2023

Tax Tribunal LC No. 21-000523-TT

Before: Noah P. Hood, P.J., and Douglas B. Shapiro and Christopher P. Yates, JJ.

HOOD P.J.

Petitioner SIXARP, LLC, doing business as Praxis Packaging Solutions (Praxis), appeals as of right the order of the Michigan Tax Tribunal (MTT) denying Praxis's motion for partial summary disposition and granting summary disposition in favor of respondent, the Township of Byron (Byron Township). We reverse and remand for further proceedings.

I. BACKGROUND

This case originates from a decision denying Praxis a tax exemption for personal property, known as the eligible manufacturing personal property (EMPP) tax exemption. Praxis provides packaging services for consumer products, handling packaging primarily for over-the-counter products and prescription pharmaceuticals, cosmetics, foods, and beverages. It operates a manufacturing plant in Byron Township, where it uses various production processes equipment, and technology to convert those products into finished goods. The manufacturing equipment that Praxis uses at the Byron Township facility is the subject of its attempt to obtain the EMPP tax exemption.

In February 2021, Praxis applied for the EMPP exemption related to its equipment by filing a combined document.^[1] On February 9, 2021, Timothy Baker, Byron Township's assessor, denied Praxis's request for the EMPP tax exemption. The denial form explained an EMPP exemption request should be denied where the personal property at issue does not "meet the eligibility requirement requirements of MCL 211.9m and MCL 211.9n." The form explained the assessor "must notify the taxpayer of the denial and their right to appeal."

Baker denied Praxis's exemption request because he found Praxis's equipment did not meet the definition of eligible manufacturing personal property as that term is defined in MCL 211.9m and MCL 211.9n. His full explanation provided:

I certify that based on my review, the qualified new personal property and/or the qualified existing personal property claimed on Form 5278 does not meet the definition of Eligible Manufacturing Personal Property as defined by MCL 211.9m and/or MCL 211.9n, therefore the Eligible Manufacturing Personal Property exemption is denied.

The denial also included a notice of appeal rights. It stated:

Notification of Taxpayers Right of Appeal

A taxpayer who timely and properly filed Form 5278 may appeal an assessor's denial of the EMPP exemption to the March Board of Review under MCL 211.30. In the case of a qualified error as defined in MCL 211.53b, an appeal may be made to the July or December Board of Review. The July or December Board of Review may not hear an appeal of a denial of the exemption from the March Board of Review.

Filing a protest with the Board of Review is necessary to protect your right to further appeal an EMPP exemption dispute to the Michigan Tax Tribunal. Michigan Tax Tribunal forms are available at www.michigan.gov/taxtrib.

On February 17, 2021, the assessor's office mailed Praxis a notice of assessment indicating that the March Board of Review would meet on March 8, 2021, and March 9, 2021. It informed Praxis that it could appeal to the Board any values it believed incorrect. It also provided a telephone number to call "before March 5 for an appointment with the Board of Review" and indicated that meetings could be attended "either in person, virtual, or by letter appeal." The notice of assessment further indicated that "letter appeals must be received by March 5, 2021," and provided the location of the Board's meetings. It also stated that a protest to the Board was necessary to protect Praxis's right to "further appeal valuation and exemption disputes" to the MTT.

On February 21, 2021, February 23, 2021, and February 25, 2021, the Grand Rapids Press published the March Board of Review's meeting schedule. The postings indicated that the Board would "convene on the 8th day of March, 2021 and shall sit not less than three calendar days to review the 2021 Assessment Roll of the Township of Byron and to hear complaints of persons considering themselves aggrieved by these values." They also indicated that taxpayers could file a "protest by letter without a personal appearance ...." The newspaper postings provided the location of the Board's meeting, as well as the days and times: March 8, 2021, from 9:00 a.m. to 5:30 p.m. and March 9, 2021, from 1:00 p.m. to 9:00 p.m. At the bottom of the posting, it stated that appointments with the Board could "be made by contacting the Assessor's Office from March 1th [sic] through March 10th."

On February 23, 2021, Praxis received notice of Baker's EMPP tax exemption denial. On February 26, 2021, Timothy Karsten, Praxis's finance controller from August 2000 until November 2021, contacted Baker to provide notice of Praxis's appeal of the exemption denial, request a hearing date, and learn the requirements for an appeal. According to Karsten, instead of providing a hearing date or the Board's schedule, Baker told Karsten to email a letter appeal. Baker, Karsten said, did not provide a deadline for submission of the letter. Karsten also indicated that Baker did not state that refiling the combined document was necessary for the appeal.

Praxis retained Lisa Pohl, a financial services professional, to handle Praxis's appeal of the EMPP exemption denial. Karsten advised Pohl of his communications with Baker, including the instructions Baker provided for filing an appeal. Karsten emailed Pohl about his February 26, 2021 conversation with Baker, indicating that Baker suggested submitting a letter appeal instead of appearing in-person, but did not provide a deadline for submission.

In early March 2021, Pohl left a voicemail for Baker. She advised him that she was handling Praxis's appeal of the exemption denial, expressed her unfamiliarity with letter appeals, asked about appeal procedures and deadlines, and requested an in-person hearing with the March Board of Review. On March 2, 2021, Baker returned Pohl's call and left a voicemail. According to Pohl's uncertified transcription of the voicemail, Baker stated:

Hi Lisa, this is Tim Baker from Byron Township Assessing. I am returning your phone call. The, uh, to your question as far as the, uh, assessment, yeah, I think the letter appeal would be the best. Just state your arguments and, uh, and then send in a letter form. We need to get you a petition, so you can sign the petition so there's something a little more formal with it. Um, so, if you can, um send me an e-mail, um, with your letter, and then I can send back a petition for you to sign.

Um, I'd also need you to include the agency agreement you have with the, uh, um, owners of the personal property. My, uh, e-mail that you can send it to, and it's a general e-mail, is assessor - a-s-s-e-s-s-o-r-@byrontownship, all spelled out, .o-r-g. And then give me a call if you have any, uh, additional questions. Thank you. Bye.

Baker did not provide a hearing date for the appeal, a deadline for filing the appeal, or the Board's meeting schedule. He also failed to advise Pohl that Praxis had to refile the combined document with the Board to perfect its appeal.

On March 2, 2021, the same day as Baker's voicemail, the March Board of Review held its first meeting. According to Baker, "[t]his first meeting was an organization meeting where the certified Assessment Rolls were received and initial corrections made." On March 8, 2021, and March 9, 2021, the Board held its second and third meetings, where it heard appeals about valuation and exemption status. It adjourned at 9:00 p.m. on March 9, 2021, because "all in person, virtual, and letter appeals had been heard and resolved." Baker attended all sessions of the 2021 March Board of Review and had reviewed all personal property parcels before the Board. He stated that none of Praxis's representatives appeared before the March 2021 Board, nor did Praxis file any documentation.

Pohl prepared a letter on Praxis's behalf-based on Baker's instructional voicemail-and emailed it to Baker on March 10, 2021. The letter explained the basis for Praxis's appeal of the exemption denial. Pohl believed Baker, based on his voicemail, would send her a petition to complete after she sent the necessary documents, but he never did. Instead, on March 11, 2021, Baker emailed Pohl stating: "I am sorry, but the March Board of Review has adjourned at 9:00 p.m. on 3/9/2021[.]" "Within minutes of receiving" Baker's email, Pohl responded, stating:

The taxpayer requested a hearing and you did not give them one. You told the taxpayer to remit a letter without providing a due date. You communicated with me and did not provide a due date. The assessor guidelines do not indicate that an assessor cannot consider an appeal if it [is] not filed by the time of the last hearing for the March Board of Review.

You were on notice that the taxpayer was going to appeal. The taxpayer followed your directions. What recourse does the taxpayer have for following your directions and being denied the exemption?

According to Pohl, Baker never responded to her email, and she did not receive any further communication from him. Neither the March Board of Review, nor Byron Township, ever contacted her about Praxis's appeal of the exemption denial.

In an affidavit, Baker stated that although he had "verbal discussions with [Praxis]" about the exemption denial he "never informed [Praxis] that [he] would take an appeal of the denial" to the Board. He also stated that he "never . . . indicated that anything less than...