Opinion ID: 4535167
Heading Depth: 3
Heading Rank: 4

Heading: “performed” & “rendered” in context

Text: We recognize that the Legislature’s use of the distinctive terms “performed” and “rendered” within the same tax statute might reasonably suggest, as the Court of Appeals 31 Honigman argues against the Court’s conclusion that the Legislature adopted an “origin test” for the sale of services on the basis that it would result in duplication of the payroll factor. This critique is not new-- as noted earlier, the Uniform Law Commissioners offered a similar one during discussions leading to the adoption of the UDITPA in 1957. See Construing the Uniform Division of Income for Tax Purposes Act, 45 U Chi L Rev at 773774 (noting that the commissioners were “of the opinion that [a sales factor with an origin test] would merely duplicate the property and payroll factors which emphasize the activity of the manufacturing state”) (quotation marks and citation omitted; alteration in original). But as already noted, that criticism did not preclude the UDITPA drafters or our Legislature from expressly adopting such a test for the sale of services. See supra note 13. While creating an apportionment scheme free entirely of overlapping factors may conceivably be a preferable or a more logical taxing approach, “[p]erfect solutions are seldom to be found in tax policy questions; in most cases, adequate solutions are the best that can be devised.” Lynn, The Uniform Division of Income for Tax Purposes Act, 19 Ohio St L J 41, 53 (1958). In recent decades, the goal of a uniform apportionment methodology has increasingly given way to policy concerns about economic development and, as a result, states have been moving away from an equally weighted three-factor apportionment formula toward a more heavily weighted receipts factor. See Hellerstein, Lessons of US Subnational Experience for EU CCCTB Initiative, A Common Consolidated Corporate Tax Base for Europe (Schön, Schreiber & Spengel eds), p 153 (“Today roughly three-quarters of the states with corporate income taxes place at least half the weight on receipts and close to a dozen have moved or are in the process of moving towards a formula based entirely on receipts.”). Since this critique has not thus far prevented the adoption of an “origin test” for the sale of services within other taxing statutes, it would be unwarranted for us to conclude that this consideration precludes such a reading of the UCITO. In any event, we are not aware of any rule of interpretation (and none here has been offered) that disfavors an otherwisereasonable interpretation of a taxing statute that yields to some degree overlapping apportionment factors. Indeed, the argument in this regard is not an argument of interpretation at all but an argument of policy, better directed to the Legislature. 27 concluded, that the Legislature intended these terms to have distinctive meanings-- specifically, that “perform” signifies “to carry out an action” and “render” signifies “to deliver.” After all, “[w]hen the Legislature uses different words, the words are generally intended to connote different meanings.” US Fidelity & Guaranty Co v Mich Catastrophic Claims Ass’n (On Rehearing), 484 Mich 1, 14; 795 NW2d 101 (2009) (emphasis added).32 And this Court is well aware that it should avoid, when reasonably possible, the adoption of essentially synonymous definitions of distinctive terms without the most careful consideration of how those terms will come to be understood within a statutory scheme. However, this maxim of jurisprudence is a “general rule” and “may not apply in every situation.” Bauserman v Unemployment Ins Agency, 503 Mich 169, 184 n 10; 931 NW2d 32 There are, however, a variety of exceptions to this general rule, for the “general rule” is perhaps better described as a default “presumption.” Most relevantly, this Court will not attribute distinctive meanings to distinctive terms where, in viewing these terms in context, the coherence of the statutory provision as a whole would be undermined. A statute must be read in its entirety and words must be assigned meanings that are in harmony with the whole of the statute. Sweatt, 468 Mich at 179. More specific exceptions may also pertain in circumstances (a) in which two words necessarily have the same commonly understood meaning, see, e.g., People v Thompson, 477 Mich 146, 153-154; 730 NW2d 708 (2007) (concluding that “keep” is synonymous with “maintain,” and “that these two terms are separated by the word ‘or’ does not give [this Court] the authority to give these two terms distinctive meanings when they are commonly understood to have the same meaning”); (b) in which different words constitute synonyms used to convey varying degrees of the same conduct, see, e.g., People v Greene, 255 Mich App 426, 440; 661 NW2d 616 (2003) (finding that “impede” and “prevent” are synonyms presenting “only degrees of difference in the same conduct”); (c) in which words located within a listing have related meanings, see, e.g., Rovas, 482 Mich at 114-115 (defining “mislead,” “deceive,” and “false” in a similar fashion by applying noscitur a sociis, which is “ ‘the principle that words grouped in a list should be given related meaning’ ”), quoting Griffith v State Farm Mut Auto Ins Co, 472 Mich 521, 533; 697 NW2d 895 (2005); or (d) in which a legislative body has sought in a thesaurus-like manner to list as many similar terms as possible in an effort to ensure that no semantic gaps are left regarding some intended element of statutory breadth or coverage. 28 539 (2019) (emphasis omitted). And in the final analysis, we believe the Court of Appeals’ reliance upon this single rule of interpretation constitutes a failure to give meaning to the statute in its entirety and in its overall context. That is, despite the Legislature’s use of the distinctive terms “performed” and “rendered,” we believe these terms should be understood as having similar meanings within the statute. “Performed” as employed in § 22 means “to carry out” and connotes a similar meaning as “rendered” in § 23, meaning, in context, “to do (a service) for another.” Merriam-Webster’s Collegiate Dictionary (11th ed). Thus, we believe the Legislature intended that both revenue for “services rendered in the city” and compensation for “services performed within the city” be calculated in a similar manner-- each predicated upon where the service has been done or carried out. The Court of Appeals rejected the same conclusion as it dutifully grappled with the meanings of these terms-- “Why would the Legislature use the word ‘render’ to mean ‘perform’ by way of the verb ‘to do,’ when it would have been much simpler and clearer to simply reuse the § 22 word ‘perform’?” Honigman, 322 Mich App at 674. To be clear, we do not conclude the two terms possess identical meanings, just as we do not conclude they possess entirely distinctive meanings. Rather, we conclude the terms are similarly defined-- in which each looks in common to where a service has been done or carried out-- but nonetheless each is to be given a distinctive connotation from the distinctive context in which each is situated within the statute. That is, review of the UCITO evidences that the Legislature consistently uses “performed” in provisions referring to the actions of an employee in relation to his or her compensation and that the Legislature consistently uses “rendered” in provisions referring to the completion of 29 professional services for another-- in particular, on behalf of a client-- and thus that pertain to business or firm earnings, such as profits and revenues. This contextual distinction is perhaps best illustrated by the confluence of §§ 22 and 23. Section 22 pertains to “the total compensation paid to employees for work done or for services performed within the city . . . .” MCL 141.622 (emphasis added). This language connects the employee’s performance of services to his or her compensation from the employer. However, § 23 pertains to the “gross revenue of the taxpayer derived from sales made and services rendered in the city . . . .” MCL 141.623 (emphasis added). This language does not pertain to the employee’s performance of services but instead connects the taxpayer’s revenue to the process by which the business or firm provides services for others, in particular, to its clients.33 And despite the distinctive contexts in which these terms are used, both compensation for “services performed within the city” under § 22 and revenue derived from “services rendered in the city” under § 23 are calculated in a similar manner, based upon where the services have been done or carried out.34 33 This contextual distinction is further illustrated in considering the definition of “compensation” under MCL 141.604(2) in conjunction with the payroll factor. Compensation is defined as “salary, pay or emolument given as compensation or wages for work done or services rendered . . . .” MCL 141.604(2) (emphasis added). When incorporating the definition of “compensation” into the payroll factor, it is clear that this factor is calculated based upon the “compensation or wages for work done or services rendered,” id., that is “paid to employees for work done or for services performed within the city,” MCL 141.622. Again, the Legislature’s use of “rendered” pertains to services done for another, while the use of “performed,” although it pertains to those same services, does so in the specific context in which those services have been carried out on behalf of, and in exchange for, an employee’s compensation from his or her employer. 34 While these two provisions provide the most pertinent example, our review of the UCITO reveals that many of its provisions evidence this same distinction in which the Legislature has clearly employed “services performed” and “services rendered” in the same 30 And thus in response to the Court of Appeals, it is this contextual distinction that underlies the Legislature’s rationale of employing separate terms throughout the statute even where these terms are intended to have an essentially common meaning and focusing the UCITO’s analysis upon where a service has been performed or carried out, not where it has been finally delivered. And it is this same contextual distinction that allows this Court ultimately to set aside the usual interpretive presumptions arising from the Legislature’s use of two such closely related terms as “performed” and “rendered.” Our recognition of the textual relationship of these terms as they appear within the UCITO is not a matter of mere academic or philological scholarship but rather explains precisely why a jurisprudential proposition of great pedigree and logic-- one understandably given credence by both the Court of Appeals and Honigman, a law firm of great distinction-- should be held inapplicable in the present case, despite the fact that this same proposition was most likely applied to cases decided last month and will most likely be applied to cases decided next month. The inapplicability of this proposition in the instant case is merely illustrative that there are sometimes competing interpretative propositions that must be balanced and harmonized in order for the Legislature’s genuine intentions to be faithfully discerned. We are confident that we have done what is proper in applying principles of textual interpretation to this dispute and in reaching an understanding of the statute that is in closest accord with the intentions of the lawmaking branch of our government. As a contextual manner. “Rendered” is consistently used in referring to the taxpayer’s earnings for services done for another, as evidenced by MCL 141.623; MCL 141.618; MCL 141.620; MCL 141.612; MCL 141.614; and “performed” is consistently used in referring to compensation for services performed by an employee, as evidenced by MCL 141.622; MCL 141.651(b); MCL 141.654; MCL 141.657(2)(b). 31 result, we are not persuaded by the Court of Appeals that the use of distinctive terms within the UCITO necessarily communicates, as that Court believed, a legislative intention thereby to communicate distinctive meanings to the critical terms in this case, “perform” and “render.” And to further respond to the Court of Appeals, it is this same contextual distinction that also explains why the Legislature did not intend these two terms to have identical meanings. The distinctive contexts in which these terms appear not only explain why the Legislature has employed separate terms to describe a common legal approach to determining which services are taxable, and which are not, but why the distinctive connotations of these terms must be respected and maintained and why “performed” and “rendered” cannot be viewed as simply interchangeable throughout the statute-- the terms have distinctive connotations, or “suggestive significance[s],” Webster’s New Collegiate Dictionary (1960), in which at least for purposes of the present statute, “performed” relates only to an employee’s compensation for services carried out for an employer and “rendered” relates only to earnings, such as net profits, derived from services done on behalf of clients.