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Warner Norcross + Judd LLP is a corporate law firm with over 230 attorneys serving clients in nine offices throughout Michigan. Among the largest law firms in Michigan, Warner works in virtually all areas of business law.

Michigan Law Firm - Warner Norcross + Judd LLP

In <em><a href="http://publicdocs.courts.mi.gov:81/SCT/PUBLIC/ORDERS/20151028_S150520_43_01_150520_2015-10-28_or.pdf" target="_blank" rel="noreferrer noopener">Consumers Energy Company v. Department of Treasury</a></em>, No. 150520-1, the Michigan Supreme Court reversed the Court of Appeals’ decision that Consumers’ electrical and natural gas distribution equipment were exempt from the Use Tax under MCL 205.94o.  The Court remanded the case to the Court of Claims for reconsideration and application of <em>Detroit Edison Co. v. Dep’t of Treasury</em> to determine the percentage of exempt use to total use.

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Last year, the Michigan Court of Appeals concluded that Consumers’ electrical distribution equipment changed the “form, composition, quality, combination, or character” of electricity before it reached customers. &nbsp;Additionally, the court reasoned that Consumers’ natural gas distribution equipment changed the character of the natural gas by making it safe and usable to customers. &nbsp;Lastly, the court concluded that contractors paid a sales tax for repair-related items that were used for Consumers’ natural gas customers, barring the application of a Use Tax.&nbsp; Therefore, the court held that Consumers’ electrical and natural gas distribution equipment were exempt from the Use Tax under MCL 205.94o, and the items purchased by third-party contractors were not subject to the Use Tax.

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Matthew T. “Matt” Nelson

Labor and Employment

MSC reverses Consumers’ Use Tax exemptions for distribution equipment

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MSC reverses Consumers’ Use Tax exemptions for distribution equipment

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