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.

Tomra of North America, Inc. v. Department of Treasury

Court of Appeals of Michigan

July 17, 2018

TOMRA OF NORTH AMERICA, INC., Plaintiff-Appellant,
v.
DEPARTMENT OF TREASURY, Defendant-Appellee. TOMRA OF NORTH AMERICA, INC., Plaintiff-Appellant,
v.
DEPARTMENT OF TREASURY, Defendant-Appellee.

          Court of Claims LC Nos. 16-000118-MT, 14-000091-MT

          Before: Gadola, P.J., and K. F. Kelly and Riordan, JJ.

          GADOLA, J.

         In these consolidated cases, plaintiff, Tomra of North America, appeals as of right the orders of the Court of Claims granting summary disposition to defendant, the Department of Treasury. In its opinion, the Court of Claims concluded that plaintiff's beverage container recycling machines did not qualify for the industrial processing exemption to tax liability as set forth in the General Sales Tax Act (GSTA), MCL 205.51 et seq., and the Use Tax Act (UTA), MCL 205.91 et seq. We reverse and remand.

         I. FACTS

         The facts relevant to this appeal are largely undisputed. Plaintiff sells and leases the container recycling machines commonly found in grocery stores, and also sells repair parts for those machines. These machines accept aluminum cans, glass bottles, and plastic bottles for recycling. When a can or bottle is placed in the machine, the machine reads the universal product code (UPC), and then sorts the accepted cans and bottles. Aluminum cans are crushed, plastic bottles are sorted by color, punctured, and compacted, while glass bottles are sorted by color. All containers are then moved to collection bins and thereafter transported to a recycling facility. At the recycling facility, the containers are dumped onto conveyor belts. Glass bottles are stored, while aluminum cans and plastic bottles are compacted into bales. The recycling facility sells the cans and bottles to manufacturers who remanufacture the materials into other products.

         In this case, the parties dispute plaintiff's obligation to pay sales and use tax with respect to the container recycling machines for the period of March 1, 2011, through December 31, 2011. During that tax period, plaintiff collected sales tax from customers to whom they sold or leased container recycling machines, and paid the sales tax collected to defendant. Similarly, during that tax period, plaintiff paid use tax to defendant related to parts used in repairing the container recycling machines sold or leased by plaintiff.[1]

         Plaintiff thereafter sought a refund of these amounts on the basis that its sales of recycling machines and repair parts were exempt from taxation under the GSTA and UTA. After defendant failed to respond to the refund request, plaintiff filed this action before the Court of Claims. Plaintiff thereafter moved for summary disposition pursuant to MCR 2.116(C)(10), seeking a ruling on the question whether plaintiff's container recycling machines and repair parts perform, or are used in, an industrial processing activity under the GSTA and UTA. The Court of Claims denied plaintiff's motion, and pursuant to MCR 2.116(I)(2), instead granted defendant summary disposition, holding that plaintiff's container recycling machines and repair parts are not used in an industrial processing activity under the GSTA and the UTA, and that plaintiff therefore is not entitled to exemption from sales and use tax for the sale and lease of the machines and their repair parts. Plaintiff now appeals.

         II. DISCUSSION

         Plaintiff contends that the Court of Claims erred in holding that plaintiff's container recycling machines and repair parts are not used in an industrial processing activity under the GSTA and the UTA, and therefore erred in granting summary disposition to defendant. We agree.

         We review de novo a trial court's grant or denial of summary disposition. Hoffner v Lanctoe, 492 Mich. 450, 459; 821 N.W.2d 88 (2012). In reviewing a decision on a motion for summary disposition under MCR 2.116(C)(10), we review the record in the same manner as the trial court, considering the pleadings, affidavits, depositions, admissions, and any other evidence in favor of the party opposing the motion. Maiden v Rozwood, 461 Mich. 109, 120; 597 N.W.2d 817 (1999). A motion for summary disposition under MCR 2.116(C)(10) tests the factual sufficiency of a claim, and is appropriately granted when, except as to the amount of damages, there is no genuine issue as to any material fact, and the moving party is entitled to judgment as a matter of law. Joseph v Auto Club Ins Ass'n, 491 Mich. 200, 206; 815 N.W.2d 412 (2012). We also review de novo the proper interpretation of statutes such as the GSTA and the UTA. See Fradco, Inc v Dep't of Treasury, 495 Mich. 104, 112; 845 N.W.2d 81 (2014); see also Granger Land Dev Co v Dep't of Treasury, 286 Mich.App. 601, 608; 780 N.W.2d 611 (2009).

         Section 4t of the GSTA, MCL 205.54t, sets forth the industrial processing exemption from the sales tax.[2] The statute provides, in relevant part:

(1) The sale of tangible personal property to the following . . . is exempt from the tax under this act:
(a) An industrial processor for use or consumption in industrial processing.
(b) A person, whether or not the person is an industrial processor, if the tangible personal property is intended for ultimate use in and is used in industrial processing by an industrial processor.
(c) A person, whether or not the person is an industrial processor, if the tangible personal property is used by that person to perform an industrial processing activity for or on behalf of an industrial processor.
* * *
(3) Industrial processing includes the following activities:
* * *
(d) Inspection, quality control, or testing to determine whether particular units of materials or products or processes conform to specified parameters at any time before materials or products first ...

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.