Searching over 5,500,000 cases.


searching
Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

SBC Health Midwest, Inc. v. City of Kentwood

Supreme Court of Michigan

May 1, 2017

SBC HEALTH MIDWEST, INC., Petitioner-Appellee,
v.
CITY OF KENTWOOD, Respondent-Appellant.

          Argued October 6, 2016 (Calendar No. 5).

         Syllabus

         SBC Health Midwest, Inc., challenged the city of Kentwood's denial of its request for a personal property tax exemption in the Tax Tribunal. SBC Health, a Delaware for-profit corporation, had requested a tax exemption under MCL 211.9(1)(a) from Kentwood for personal property used to operate the Sanford-Brown College Grand Rapids. The tribunal, Steven H. Lasher, J., determined that the exemption provided by MCL 211.9(1)(a) applied only to nonprofit educational institutions. SBC Health appealed. The Court of Appeals, Murphy, P.J., and Meter and Servitto, JJ., reversed the tribunal in an unpublished per curiam opinion, issued March 19, 2015. The Court reasoned that the unambiguous language of MCL 211.9(1)(a) provides a tax exemption for the personal property of an educational institution operated in Michigan regardless of its for-profit status. The Court of Appeals remanded the case to the tribunal to determine whether SBC Health qualified for the exemption in MCL 211.9(1)(a). The Supreme Court granted Kentwood's application for leave to appeal the Court of Appeals' decision. 498 Mich. 956 (2015).

         In a unanimous opinion by Justice Zahra, the Supreme Court held:

         The General Property Tax Act, MCL 211.1 et seq., mandates that all real and personal property in Michigan be subject to taxation unless expressly exempted. The plain and unambiguous language of MCL 211.9(1)(a) exempts from taxation the personal property of charitable, educational, and scientific institutions. The Tax Tribunal erred by concluding that MCL 211.7n, a statute specifically exempting from taxation the real or personal property owned and occupied by nonprofit educational institutions, controls over the more general statute, MCL 211.9(1)(a), which authorizes a tax exemption for educational institutions without regard to the institution's nonprofit or for-profit status. The rules of statutory interpretation require that statutory language be examined for legislative intent. MCL 211.7n exemplifies the Legislature's intent to limit the content of that statute to nonprofit institutions. In contrast, the Legislature omitted any requirement that the institutions referred to in MCL 211.9(1)(a) be nonprofit institutions. The absence of that requirement is presumed to be intentional. Reading the two statutes together and recognizing that each addresses a tax exemption for an educational institution's personal property means only that a nonprofit educational institution has two paths to tax exemption, while a for-profit educational institution is limited to the path in MCL 211.9(1)(a). The nonprofit requirement in MCL 211.7n does not negate a for-profit educational institution like SBC Health from pursuing an exemption under MCL 211.9(1)(a). Further, the tax exemption available under MCL 211.9(1)(a) does not conflict with the constitutional mandate that nonprofit educational organizations be exempt from real and personal property taxes. The constitutional mandate guarantees tax exemption for nonprofit educational institutions. It does not prevent the Legislature from passing laws that provide tax benefits for other organizations. The tax exemption outlined in the unambiguous language in MCL 211.9(1)(a) applies to all educational institutions, for-profit or nonprofit, that meet the requirements specified in MCL 211.9(1)(a).

         Affirmed and remanded to the Tax Tribunal to determine whether SBC Health satisfies the requirements of MCL 211.9(1)(a), which would entitle it to the tax exemption it seeks.

          Chief Justice: Stephen J. Markman Justices: Brian K. Zahra Bridget M. McCormack David F. Viviano Richard H. Bernstein Joan L. Larsen.

         BEFORE THE ENTIRE BENCH

          OPINION

          ZAHRA, J.

         Petitioner, SBC Health Midwest, Inc., is a Delaware for-profit corporation that operated a college. Petitioner requested a tax exemption under MCL 211.9(1)(a) for personal property used to operate the college. Respondent, the city of Kentwood, denied the exemption. Petitioner appealed in the Tax Tribunal, which also rejected the claim of exemption. The tribunal concluded that MCL 211.9(1)(a) only provides an exemption to nonprofit educational organizations. Undeterred by repeated rejection, petitioner appealed in the Court of Appeals, which reversed the Tax Tribunal. We granted leave to address whether the personal property tax exemptions set forth under MCL 211.9(1)(a) are available to for-profit educational institutions. We hold that the text of MCL 211.9(1)(a) plainly exempts from taxation "[t]he personal property of charitable, educational, and scientific institutions incorporated under the laws of this state."[1]Nothing in this language requires that an educational institution demonstrate nonprofit status to claim the exemption. We decline to import a nonprofit requirement into MCL 211.9(1)(a), because it would contravene a well-established rule of statutory construction preventing this Court from reading into a statute words that the Legislature has not included.[2] The judgment of the Court of Appeals is affirmed.

         I. FACTS AND PROCEEDINGS

         The facts of this case are simple and uncontroverted. Petitioner operated Sanford-Brown College Grand Rapids. Notwithstanding its name, this educational institution was actually operated in respondent, the city of Kentwood. Respondent assessed the personal property at the school pursuant to MCL 211.1.[3] Petitioner requested a personal property tax exemption under MCL 211.9(1)(a)[4] for the tax years 2011 through 2013. Respondent denied the tax exemption.

         Petitioner challenged respondent's denial of the tax exemption before the Tax Tribunal, maintaining that the property was exempt under MCL 211.9(1)(a) because it was the personal property of an educational institution. Respondent answered that granting a tax exemption to a for-profit corporation under MCL 211.9(1)(a) would conflict with the remainder of the statutory scheme regarding other tax exemptions for educational institutions, most notably MCL 211.7n, which provides an exemption for real or personal property owned and occupied by a nonprofit educational institution.[5]Respondent also claimed that its narrow interpretation of MCL 211.9(1)(a) is supported by the Michigan Constitution, which expressly authorizes a tax exemption for nonprofit educational organizations.[6]

         The Tax Tribunal agreed with respondent, relying on the in pari materia canon of statutory construction. More specifically, the tribunal determined that when the two statutes are read together, the most recent and specific statute-that is, MCL 211.7n- must prevail if there is any conflict between the two statutes. The tribunal concluded that because MCL 211.7n provides a tax exemption only for real estate and personal property owned and occupied by nonprofit institutions, petitioner was not entitled to an exemption under the more general provisions of MCL 211.9(1)(a).

         In an unpublished per curiam opinion, the Court of Appeals reversed the Tax Tribunal. Pertinent to the issue before this Court, the Court of Appeals panel held that when applying the unambiguous language of MCL 211.9(1)(a), the personal property of an educational institution operated in this state is exempted from taxation.[7] The panel remanded the case to the Tax Tribunal to consider whether petitioner met the criteria for exemption under MCL 211.9(1)(a), regardless of its for-profit status; we granted respondent's application for leave to appeal.[8]

         II. STANDARD OF REVIEW

         Absent a claim of fraud, this Court reviews decisions from the Tax Tribunal for the misapplication of law or the adoption of a wrong legal principle.[9] "We deem the tribunal's factual findings conclusive if they are supported by 'competent, material, and substantial evidence on the whole record.' "[10] This Court reviews de novo the tribunal's interpretation of a tax statute.[11] "When interpreting statutory language, our obligation is to ascertain the legislative intent that may reasonably be inferred from the words expressed in the statute."[12] "This requires us to consider the plain meaning of the critical word or phrase as well as its placement and purpose in the statutory scheme."[13] This Court, as with all other courts, must give effect to every word, phrase, and clause in a statute, to avoid rendering any part of the statute nugatory or surplusage.[14] Though this Court will generally "defer to the Tax Tribunal's interpretation of a statute that it is delegated to administer, " that deference will not extend to cases in which the tribunal makes a legal error.[15] Thus, agency interpretations are entitled to "respectful consideration" but cannot control in the face of contradictory statutory text.[16]

         III. ANALYSIS

         Under the General Property Tax Act, [17] "all property, real and personal, within the jurisdiction of this state, not expressly exempted, shall be subject to taxation."[18] This Court has historically required that tax exemptions be narrowly or strictly construed in favor of the government.[19] Yet at the same time, we have held that this requirement does not permit a "strained construction" that is contrary to the Legislature's intent.[20]

Petitioner sought its tax exemption under MCL 211.9(1)(a), which provides:
The following personal property, and real property described in subdivision (j)(i), is exempt from taxation:
(a) The personal property of charitable, educational, and scientific institutions incorporated under the laws of this state.[[21]

         When construing a statute, courts are to effect the intent of the Legislature.[22] To do so, we begin with an examination of the language of the statute.

If the statute's language is clear and unambiguous, then we assume that the Legislature intended its plain meaning and the statute is enforced as written. People v Stone, 463 Mich. 558, 562; 621 N.W.2d 702 (2001). A necessary corollary of these principles is that a court may read nothing into an unambiguous statute that is not within the manifest intent of the Legislature as derived from the words of the ...

Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.