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Michigan Bar Journal: Four Recent Legislative Developments Address Tax Questions Important to All Attorneys

May 17, 2016
Tax Article

The article below, authored by Varnum tax attorney Wayne Roberts, was originally published in the Michigan Bar Journal:

Taxation in Michigan has been dynamic in recent years. We have seen two complete overhauls of the business tax structure and a repeal of the personal property tax system; we even witnessed a one-day services tax. In 2015, four additional changes fundamentally altered the manner in which taxes are administered and collected in Michigan. This article highlights these developments and provides an overview of each in a practical format for both tax and nontax attorneys.

As of early 2016, taxpayers can appeal their tax disputes to a Michigan court on a predeprivation basis. On June 16, 2015, Governor Rick Snyder signed into law Enrolled SB 100, eliminating the requirement that taxpayers pay all taxes, penalties, and interest before they can have their tax appeals heard by a court and guaranteeing that they have their day in court before being required to pay disputed tax assessments.

Before the enactment of SB 100, taxpayers had two options for appealing an adverse tax decision: appeal to the Michigan Tax Tribunal, a quasi-judicial agency that hears tax disputes, without paying amounts that were in dispute; or appeal to the Michigan Court of Claims, but only after paying all amounts assessed, including contested amounts. This dichotomy with respect to whether disputed taxes had to be prepaid created two very different alternatives for taxpayers. A taxpayer could effectively be denied access to the court system simply because the disputed tax assessments were too large to prepay—even if the taxpayer might ultimately win in court. Michigan enacted SB 100 to effectively level the playing field between the two appellate alternatives for taxpayers.

Read the article in its entirety: Four Recent Legislative Developments Address Tax Questions Important to All Attorneys

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