Opinion ID: 2710725
Heading Depth: 1
Heading Rank: 3

Heading: analysis

Text: These cases involve appeals of sales tax deficiency assessments, which are administered pursuant to the General Sales Tax Act (GSTA).14 The GSTA directs the department to in part administer the sales tax pursuant to the revenue collection act.15 Under this act, when the department conducts an audit and ultimately issues a final assessment stating that a taxpayer owes sales tax, it potentially has two notice obligations: it must provide notice to the taxpayer and, if the taxpayer has appointed a representative, the department must provide the representative with copies of “letters and notices regarding a dispute” between the taxpayer and the department. MCL 205.8. MCL 205.28 establishes the department’s notice obligations to the taxpayer: (1) The following conditions apply to all taxes administered under this act unless otherwise provided for in the specific tax statute: 12 Koontz v Ameritech Servs, Inc, 466 Mich 304, 312; 645 NW2d 34 (2002). 13 Sun Valley Foods Co v Ward, 460 Mich 230, 237; 596 NW2d 119 (1999), quoting Bailey v United States, 516 US 137, 145; 116 S Ct 501; 133 L Ed 2d 472 (1995). 14 MCL 205.51 et seq. 15 In administering taxes generally, the department must adhere to MCL 205.21 to 205.30, “[u]nless otherwise provided by specific authority in a taxing statute.” MCL 205.20. The GSTA is a taxing statute, and it dictates that the department follow the revenue collection act, MCL 205.1 to 205.31, in administering the sales tax. MCL 205.59(1). 7 (a) Notice, if required, shall be given either by personal service or by certified mail addressed to the last known address of the taxpayer. Service upon the department may be made in the same manner.[16] MCL 205.8 establishes the department’s notice obligations to the taxpayer’s designated representative: If a taxpayer files with the department a written request that copies of letters and notices regarding a dispute with that taxpayer be sent to the taxpayer’s official representative, the department shall send the official representative, at the address designated by the taxpayer in the written request, a copy of each letter or notice sent to that taxpayer. A taxpayer shall not designate more than 1 official representative under this section for a single dispute.[17] The department argues that MCL 205.8 is a nonbinding obligation—a mere “courtesy” provision, of which the taxpayer is simply the beneficiary. Alternatively, the department argues that MCL 205.8 operates to protect department employees from liability that would otherwise befall them if they disclosed a taxpayer’s information to the taxpayer’s representative without permission.18 It is not clear how either of these arguments obviates the department’s obligation to provide the notice the statute requires, and the statutory text belies these claims. The Legislature’s use of the word “shall” in both MCL 205.8 and MCL 205.28(1)(a) indicates a mandatory and imperative directive.19 The two notice provisions are, by their terms, both compulsory, as each states that the department “shall” provide the required notice. 16 MCL 205.28(1)(a) (emphasis added). 17 MCL 205.8 (emphasis added). 18 See MCL 205.28(1)(f). 19 Browder v Int’l Fidelity Ins Co, 413 Mich 603, 612; 321 NW2d 668 (1982). 8 Further, the GSTA states that the department “shall” administer the sales tax—including its assessment of sales tax deficiencies—pursuant to the revenue collection act, which encompasses both notice statutes.20 We conclude that MCL 205.8 is mandatory notwithstanding the greater specificity of MCL 205.28(a)(1), which requires personal service or notice by certified mail, because that specificity has no bearing on the elements of the statute that impose a mandatory obligation to provide notice to a designated taxpayer representative. Similarly, it is irrelevant that MCL 205.8 requires that “copies” of notices and letters be provided to a taxpayer’s representative. Applying the plain meaning of “shall,” there can be no doubt that MCL 205.8 unambiguously directs the department to furnish a taxpayer’s representative with these documents whenever the taxpayer is entitled to receive the same. Reading the notice statutes in pari materia with MCL 205.22 confirms the notice statutes’ parity. Statutes that relate to the same subject matter or share a common purpose must be read together as constituting one law, even if they contain no reference to one another and were enacted on different dates.21 Conflicting provisions of such statutes must be read together to produce a harmonious whole and to reconcile any 20 MCL 205.59(1). 21 Jennings v Southwood, 446 Mich 125, 136; 521 NW2d 230 (1994); Crawford Co v Secretary of State, 160 Mich App 88, 95; 408 NW2d 112 (1987). 9 inconsistencies wherever possible.22 The purpose of this interpretive rule is to give effect to the legislative purpose as found in statutes on a particular subject.23 MCL 205.22, which dictates procedures surrounding a taxpayer’s appeal, does not refer to either MCL 205.8 or MCL 205.28(1)(a). MCL 205.22 merely states that the appeal period begins to run upon “issuance of the assessment, decision, or order.”24 Just as MCL 205.22 does not refer to either notice requirement, neither of the noticerequirement statutes refers to MCL 205.22. Accordingly, there is no statutory indication suggesting that we hold MCL 205.8’s taxpayer representative notice requirement in lower esteem than the MCL 205.28(1)(a) taxpayer notice requirement. When notice is required, the department must notify the taxpayer and any representative duly appointed by the taxpayer. Having determined that the Legislature intended MCL 205.8 to apply to the department coextensively with MCL 205.28(1)(a), we turn to the relationship between notice and issuance of the assessment. By statute, the appeal period cannot begin to run until “issuance of the assessment” occurs.25 The department concedes that if it fails to 22 World Book, Inc v Dep’t of Treasury, 459 Mich 403, 416; 590 NW2d 293 (1999). 23 Jennings, 446 Mich at 137. 24 MCL 205.22(5). Specifically, MCL 205.22(5) states that “[a]n assessment is final, conclusive, and not subject to further challenge after 90 days after the issuance of the assessment, decision, or order . . . .” This reflects the outer bound of an appeal’s timeliness, as MCL 205.22(1) permits an appeal to the Tax Tribunal within 35 days after the assessment or to the Court of Claims within 90 days after the assessment. In reading MCL 205.22 as a whole, it is apparent that both appeal periods begin to run upon “issuance” of the assessment. 25 MCL 205.22(5). 10 comply with MCL 205.28(1)(a), issuance does not occur.26 Because the two notice statutes stand on equal footing, the department’s concession compels the same consequence for its failure to comply with MCL 205.8, namely, that issuance does not occur. Furthermore, MCL 205.21(2)(f) provides a textual link between issuance of the final assessment and provision of the required notices.27 Under that section, a final assessment of a tax deficiency “is final and subject to appeal as provided in [MCL 205.22]. The final notice of assessment shall include a statement advising the person of a right to appeal.”28 The statute equates “final assessment” with “final notice of assessment” by using the terms interchangeably.29 The notice and the assessment are one and the same. It follows that the assessment cannot issue if the notices do not issue. Given its plain meaning, “issuance” requires actual distribution; the root word, “issue,” is 26 At oral argument, counsel for the department conceded that if the department does not comply with MCL 205.28(1)(a), it does not provide notice, and the consequence of not providing notice is that an assessment was never issued. 27 MCL 205.21(2)(f) reads in full: If the taxpayer does not protest the notice of intent to assess within the time provided in subdivision (c), the department may assess the tax and the interest and penalty on the tax that the department believes are due and payable. An assessment under this subdivision or subdivision (e) is final and subject to appeal as provided in section 22. The final notice of assessment shall include a statement advising the person of a right to appeal. [Emphasis added.] 28 Id. 29 Indeed, “[i]t was previously the practice of [the department] to use the phrasing ‘notice of assessment’ when it issued assessments.” Fradco, 298 Mich App at 300. 11 defined as “the act of sending out or putting forth; promulgation; distribution.”30 Thus, in addition to our determination that the two statutory notice requirements apply to the department with equal force, we further conclude that satisfaction of both notice requirements is required before issuance of the assessment is deemed to have occurred, starting the appeal period. Because the department delayed issuing the notices of assessment to the taxpayers’ representatives in both cases before us, the running of the appeal periods were also delayed. The taxpayers’ appeals were therefore timely, and the Tax Tribunal retained jurisdiction.31