-1- 

### STATE OF MICHIGAN

COURT OF APPEALS

W SOULE & COMPANY,

Plaintiff-Appellant, UNPUBLISHED January 17, 2017

v No. 329213 Court of Claims DEPARTMENT OF TREASURY, LC No. 14-000163-MT

Defendant-Appellee.

Before: O’C ONNELL , P.J., and M ARKEY and M URRAY , JJ.

P ER C URIAM

. Plaintiff, W Soule & Company (Soule), appeals as of right an o rder granting summary disposition to defendant, Departmen t of Treasury (the Departmen t), regarding Soule’s claim for a tax refund. We affirm.

I. FACTUAL AND PROCED URAL BACKGROUND

Soule provides process integration, fabrication, and other ser vices to industrial and commercial enterprises. In March 2011, the Department indicate d that it would audit Soule’s sales and use tax from March 2007 through February 2011. The D epartment’s preliminary findings indicated that Soule, due to inadequate internal contr ols, had failed to report a total of about $1.3 million of sales and use tax liability. The Departm ent provided Soule with a Notice of Preliminary Audit Determination on January 24, 2014. Soule agreed that its internal controls were inadequate and, in response to the Department’s Notice, on February 7, 2014, Soule signed the Notices, checked the boxes indicating that it agreed with t he preliminary determination, and paid the deficiencies.

However, on February 6, 2014, 2014 PA 3 went into effect. 201 4 PA 3 abolished the statute of limitations tolling period for de ficiency actions du ring audit periods. O n April 2, 2014, Soule requested a refund for the taxes it had paid for March 20 07 through December 2009. Soule asserted that the four-yea r statute of limitations now ba rred the Department from collecting taxes for that period because it was not entitled to limitations tolli ng during its audit period.

After additional communications failed to resolve the dispute, Soule filed this action in the Court of Claims. Soule moved for summary disposition under MCR 2.116(C)(10), asserting that the statute of limitations barred the Department from coll ecting taxes from March 2007-2- through December 2009. The Department counter-asserted that it was entitled to summary disposition under MCR 2.116(I) beca use 2014 PA 3 did not apply retroactively a nd, even if it did apply, it barred Soule’s claim for refund.

The Court of Claims ultimately entered judgment in favor of th e Department, concluding that the Department improperly collected the taxes but that Sou le was not entitled to a refund because its claim for refu nd was untimely under 2014 PA 3. Sou le now appeals.

II. STANDARDS OF REVIEW

This Court reviews de novo the trial court’s decision on a mot ion for summary disposition. Maiden v Rozwood , 461 Mich 109, 118; 597 NW2d 817 (1999). MCR 2.116(I)(1) provides that “[i]f the pleadings show that a party is entitled to judgment as a matter of law, or if the affidavits or other proofs show that there is no genuine is sue of material fact, the court shall render judgment without delay.” T his Court reviews de novo the interpretation and application of tax statutes. Ford Motor Co v Woodhaven , 475 Mich 425, 438; 716 NW2d 247 (2006).

III. ANALYSIS

Soule’s contentions rest on its p rimary argument that changes to the statute of limitations under 2014 PA 3 barred the Department from retaining the taxes Soule paid for the March 2007 to December 2009 period. We disagree.

When the Department initiated its audit, the prior version of MCL 205.27a(2) provided a four-year statute of limitations for both tax assessments and c laims for refund, but MCL 205.27a(3) tolled the limitations pe riod for the duration of a state audit. 2011 PA 304. However, MCL 205.27a, as amended by 2014 PA 3, provides a four-year stat ute of limitations but does not include such a tolling period:

(2) A deficiency, interest, or penalty shall not be assessed after the expiration of 4 years after the date set for the filing of the required return or after the date the return was filed, whichever is later. The taxpayer shall not c laim a refund of any amount paid to the department af ter the expiration of 4 years a fter the date set for the filing of the original return. A person who has failed to file a return is liable for all taxes due for the entire period for which the person wo uld be subject to the taxes. If a person subject to tax fraudulently conceals any li ability for the tax or a part of the tax, or fails to notify the department of any alter ation in or modification of federal tax liabi lity, the department, within 2 years after discovery of the fraud or the failure to notify, shall assess the tax wit h penalties and interest as provided by this act, computed from the date on which the ta x liability originally accrued. The tax, penalties, and interest are due a nd payable after notice and hearing as pr ovided by this act.

(3) The statute of limitations shall be extended for the follow ing if the period exceeds that described in [MCL 205.27a(2)]:-3- (a) The period pending a final de termination of tax through aud it, conference, hearing, and litigation of liabili ty for federal income tax and for 1 year after that period.

(b) The period for which the ta xpayer and the state treasurer h ave consented to in writing that the period be extended.

(c) The period described in [MCL 205.21(6) and (7)] or pending the completion of an appeal of a final assessment.

(d) A period of 90 days after a decision and order from an info rmal conference, or a court order that finally resol ves an appeal of a decision of the department in a case in which a final assessment was not issued prior to appeal . [Emphasis added.]

Soule argues that it is entitled to a tax refund because MCL 2 05.27a(2)’s limitations period had expired by the time the Department collected the tax . However, the plain language of that section applies the four-year period to assessments . The Department did not assess taxes for that period in this case: rather, it issued a preliminary stat ement that it intended to issue an assessment, and Soule responded by paying the taxes owed. Beca use Soule paid the amount owed, the deficiency was resolve d and the Department never issu ed an assessment. Accordingly, MCL 205.27a(2), which prohibits the Department from assessing d eficiencies, does not apply to the facts in this case.

We conclude that the statute of limitations did not render the Department’s collection of taxes unlawful in this case. Simply put, the Department never issued an assessment because Soule voluntarily paid its tax de ficiency. Given our conclusio n on this issue, we need not decide whether the Court of Claims correctly decided that Soule’s clai m for refund was untimely because it reached the correct result for the wrong reason. Se e Gleason v Mich Dep’t of Transp
, 256 Mich App 1, 3; 662 NW2d 822 (2003).

We affirm.

/s/ Peter D. O’Connell /s/ Jane E. Markey /s/ Christopher M. Murray