Tribunal LC No. 15-005680-TT
Before: Sawyer, P.J., and Borrello and Servitto, JJ.
issue in this case is whether MCL 205.94k(4) entitled
petitioner to a use-tax exemption where it carries
customers' property across state lines incidental to
petitioner's business of providing repair services. We
conclude that it does not.
provides repair and maintenance services to electrical
utilities, specializing in emergency restoration services.
While based in Battle Creek, it provides services in a number
of other states. For example, if a storm knocks out power,
petitioner may be dispatched to another state to assist in
power restoration. Its trucks leave its facility in Battle
Creek empty, stop at the customer's storage yard and pick
up the necessary supplies, such as power poles and
transformers, and then proceed to the repair site. When
finished, the trucks return to Battle Creek empty. It is
undisputed that petitioner would be subject to the Michigan
Use Tax unless it qualifies for the rolling stock exemption
under MCL 205.94k(4). The tax tribunal rejected
petitioner's claim for the exemption because it
determined that petitioner is not an "interstate fleet
motor carrier." We agree.
205.94k(4) provides as follows:
For taxes levied after December 31, 1992, the tax levied
under this act does not apply to the storage, use, or
consumption of rolling stock used in interstate commerce and
purchased, rented, or leased by an interstate fleet motor
carrier. A refund for taxes paid before January 1, 1997 shall
not be paid under this subsection if the refund claim is made
after June 30, 1997.
205.94k(6) defines the terms in the statute relevant to this
(d) "Interstate fleet motor carrier" means a person
engaged in the business of carrying persons or property,
other than themselves, their employees, or their own
property, for hire across state lines, whose fleet mileage
was driven at least 10% outside of this state in the
immediately preceding tax year.
(g) "Qualified truck" means a commercial motor
vehicle power unit that has 2 axles and a gross vehicle
weight rating in excess of 10, 000 pounds or a commercial
motor vehicle power unit that has 3 or more axles.
(i) "Rolling stock" means a qualified truck, a
trailer designed to be drawn behind a qualified truck, and
parts or other tangible personal property affixed to or to be
affixed to and directly used in the operation of either a
qualified truck or a trailer designed to be drawn behind a
review of decisions of the tribunal is limited. Absent fraud, we
review the decision for an the adoption of a wrong principle
or an error of law. Furthermore, we review questions of
statutory construction de novo. Moreover, the taxpayer bears the
burden of establishing its entitlement to the
205.94k(6)(d) defines "interstate fleet motor
carrier" as "a person engaged in the
business of carrying persons or property . . . for hire
across state lines . . . ." (Emphasis added.) The
definite article "the" has a specifying or
particularizing effect. A good illustration of this is the
Supreme Court's discussion in Robinson v City of
Detroit,  regarding the meaning of "the
proximate cause" versus "a proximate cause":
"The Legislature's use of the definite article
'the' clearly evinces an intent to focus on one
cause. The phrase 'the proximate cause' is best
understood as meaning the one most immediate, efficient, and
direct cause preceding an injury."
leads us to conclude that the Legislature's use of
"the" in the phrase "the business of carrying
persons or property . . . for hire across state lines"
indicates the intent to focus not on what activities a
business might include, but on the primary purpose of the
business. That is, to qualify as an "interstate fleet
motor carrier" the primary purpose of the business must
be to transport persons or property for hire across state