Michigan Governor Rick Snyder Signs Legislative Bill Trampling Taxpayer Rights

Dallas, Texas (Sep. 12, 2014)– Ryan, a leading global tax services firm with the largest indirect and property tax practices in North America, today announced that Governor Rick Snyder has signed legislation that extinguishes millions of dollars of pending refund claims under the state’s business tax. Senate Bill 156 repeals—retroactive to January 1, 2008—a Michigan law that permitted taxpayers to elect to apportion their Michigan Business Tax using a three-factor apportionment formula contained in the Multistate Tax Compact (MTC). The Michigan Department of Treasury (“Department”) has maintained that the three-factor formula option was repealed by implication effective January 1, 2008, when the state adopted the Michigan Business Tax Act. This act required taxpayers to apportion using a single sales factor formula. On July 14, 2014, the Michigan Supreme Court disagreed, upholding the taxpayer’s right to the three-factor apportionment option in International Business Machines (IBM) Corp. v. Dep’t of Treasury. The Department filed a motion for rehearing, which is still pending before the Court.

“Faced with millions of dollars of lawful refund claims, Governor Snyder and the Michigan Legislature have egregiously denied the rights of corporate taxpayers by rewriting law retroactively to circumvent the Supreme Court ruling, specifically eliminating millions of dollars of taxpayers’ rightful claims to refunds,” said Susan Traylor Bittick, Principal and Public Affairs Practice Leader of Ryan. “The retroactive language was added to Senate Bill 156, passed by both chambers, and signed by Governor Snyder in a period of less than 48 hours, and without the benefit of a public hearing. This process was an affront to the many Michigan businesses this bill affects, and the legislation sets a dangerous precedent for future overreach to squash the rights of corporate taxpayers, render tax laws meaningless, and provide unlimited power to the taxing authorities.”

About Ryan

Ryan, an award-winning global tax services and software provider, is the largest Firm in the world dedicated exclusively to business taxes. Headquartered in Plano, Texas, the Firm combines deep tax expertise with practitioner-built technology and comprehensive consulting, compliance, and advocacy capabilities. Supported by the acclaimed myRyan work environment, more than 7,600 team members are empowered to deliver exceptional results for more than 87,000 clients in over 80 countries, including many of the world’s most prominent Global 5000 companies. Driven by a commitment to client advocacy, Ryan helps businesses pay only what they owe, freeing capital to invest, grow, and thrive. More information about Ryan can be found at ryan.com.

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