This Court has not had an earlier occasion to rule on the definition of a hospital under the use tax act. In reviewing decisions from the tax tribunal, this Court is limited to deciding whether the tribunal's factual findings are supported by competent, material, and substantial evidence. More than a scintilla of evidence is required, although a preponderance of the evidence is not necessary. In the absence of fraud, this Court reviews whether the tax tribunal made an error of law or adopted an incorrect legal principle. Additionally, petitioners ask this Court to examine the tribunal's interpretation of the use tax act.
Statutory interpretation is a question of law subject to de novo review on appeal.
A nonprofit hospital or nonprofit housing includes only the property of a nonprofit hospital or the homes or dwelling places constructed by a nonprofit housing entity, the income or property of which does not directly or indirectly inure to the benefit of an individual, private stockholder, or other private person. In 1949, the Legislature amended the use tax act to create the contractor's exemption. The contractor's exemption applied to tangible personal property that contractors purchased and used during the construction, alteration or improvement of real estate owned by nonprofit groups, including hospitals. In 1970, the Legislature narrowed the construction exemption by excluding all groups that previously had fallen within that exemption - except for nonprofit hospitals and nonprofit housing entities. The sparse legislative history in existence shows that the 1969 bill to amend the contractor's exemption was designed to limit the exemption.