Court Opinion

ID: 9664496
Source: CourtListenerOpinion
Date Created: 2023-08-24 00:19:52.873284+00
Date Added: 2024-06-11T18:15:06.670028
License: Public Domain

Sawyer, P.J.
(dissenting). I respectfully dissent. At first blush, it is tempting to dismiss petitioner’s claim that Mailbox Values is a periodical within the meaning of the tax code since, with the exception of the public service announcement relating to missing children on the accompanying mailing card, Mailbox Values contains nothing but a loose-leaf collection of advertising materials. However, for the reasons to be discussed below, I conclude that nothing within the tax code itself or within the general definition of the word "periodical” warrants such a conclusion.
MCL 205.94; MSA 7.555(4) contains a list of various exemptions from the use tax, and subsection (n) provides:
A newspaper or periodical classified under federal postal laws and regulations effective September 1, 1985 as second class mail matter or as a controlled circulation publication or qualified to accept legal notices for publication in this state, as defined by law, or any other newspaper or periodical of general circulation, established at least 2 years, and published at least once a week, and a copyrighted motion picture film. Tangible personal property used or consumed, and not becoming a component part of a newspaper or periodical, except that portion or percentage of tangible personal property used or consumed in producing an advertising supplement that becomes a component part of a newspaper or periodical, and a copyrighted motion picture film is subject to tax. For purposes of this subdivision, tangible personal property that becomes a component part of a *429newspaper or periodical, and thereby not subject to tax, shall include an advertising supplement inserted into and circulated with a newspaper or periodical which is otherwise exempt from tax under this subdivision, if the advertising supplement is delivered directly to the newspaper or periodical by a person other than the advertiser, or the advertising supplement is printed by the newspaper or periodical. [Emphasis supplied.]
Thus, an exemption is established for four classifications of publications as well as for tangible personal property used or consumed in producing an advertising supplement to such newspaper or periodical. Petitioner does not claim that it comes under the first three provisions; rather, petitioner maintains that Mailbox Values constitutes "any other newspaper or periodical of general circulation, established at least 2 years, and published at least once a week . . . .” While it is admitted that Mailbox Values has been established at least two years and is published at least once a week, respondent argues that it is not a "periodical of general circulation.” I disagree.
As the majority notes, exemption statutes are to be strictly construed in favor of the taxing unit; however, those statutes are nevertheless to be interpreted by applying the ordinary rules of statutory construction. Ass’n of Little Friends, Inc v Escanaba, 138 Mich App 302, 307; 360 NW2d 602 (1984). Turning to the question whether petitioner’s publication constitutes a "periodical” as that word is used in § 4(n) of the Use Tax Act, the word "periodical” is not otherwise defined in the statute, and, therefore, we must assign it its ordinary meaning. Niggeling v Dep’t of Transportation, 183 Mich App 770, 775; 455 NW2d 415 (1990).
The Random House College Dictionary (rev ed, 1984), p 987, defines "periodical” as follows:
*43022. 1. a magazine or other publication that is issued at regularly recurring intervals. —adj. 2. published at regularly recurring intervals. 3. of or pertaining to such publications. 4. periodic.
Additionally, Random House, supra at 1069, defines "publication” and "publish” as follows:
publication . . . n. 1. the act of publishing. 2. the act of bringing to public notice. 3. the state or fact of being published. 4. something that is published, esp. a periodical. . . .
publish . . . v.t. 1. to issue (printed or otherwise reproduced textual or graphic material) for sale or distribution to the public. 2. to issue publicly the work of (an author, artist, etc.). 3. to announce formally or officially. 4. to make publicly or generally known. —v.i. 5. to engage in the publishing to textual or graphic material. 6. (of an author) to have work published.
With these definitions in mind, I must conclude that Mailbox Values constitutes a "periodical.” Mailbox Values is published inasmuch as it is the printed use of textual or graphic materials for distribution to the public, making it a publication, and it is issued at regular intervals (weekly), making it a periodical.
The tribunal in its decision concluded that the word "periodical” must be read as being a periodical entitled to second-class mail classification. The tribunal’s conclusion, however, is incorrect. The tribunal reasoned that the Legislature must have intended the word "periodical” to have the same meaning when used in the classification of a periodical classified as second-class mail and in the classification of periodicals of general circulation:
While petitioner may argue, as it did in its Brief *431for Reconsideration, that the Tribunal should expand the meaning of the phrase "periodical of general circulation” to beyond that of a periodical entitled to second class mail, such an argument is clearly without merit in light of the established rules of statutory construction. Had the legislature intended the word "periodical” to have one meaning in the phrase ". . . (a) . . . periodical classified under present federal postal laws and regulations as second class mail matter . . .” and a different meaning in the phrase "... periodical of general circulation, established at least two years, and published at least once a week . . .” then the legislature, having modified the word "periodical” by use of the words "of general circulation, established at least two years and published at least once a week”, would certainly have further modified this word. Since it chose not to do so, we must conclude that the legislature intended the word "periodical” to have a consistent meaning throughout section [4](n).
While the tribunal is correct that the word "periodical” must be given the same meaning throughout the statute, it does not follow that that meaning must include the content regulations applicable to second-class mail. Indeed, the rules of statutory construction require that we define "periodical” as being some class of entities larger than that which constitutes second-class mail. All provisions of a statute must be construed so as to give them meaning, because none of the language of the statute should be treated as surplusage or rendered nugatory. Niggeling, supra at 775. If it is concluded that the Legislature intended the word "periodical” to be used throughout the statute as referring to periodicals qualified as second-class mail, then the statutory provision applying to periodicals of general circulation would be rendered nugatory. That is, since the statute exempts all newspapers and periodicals qualified as second-*432class mail, the provisions relating to periodicals of general circulation established at least two years and published at least weekly would be unnecessary since, if such a restricted definition of "periodical” were accepted, all such periodicals would already be included within the general exemption.
Accordingly, in order to give both provisions of subsection (4)(n) meaning, the Legislature must have intended a definition of "periodical” which is broader than both second-class mail and periodicals of general circulation. Having created such a general class of "periodicals,” the Legislature then established two subcategories, those of second-class mail and those of general circulation established at least two years and published weekly, which qualify for the use tax exemption. Accordingly, the conclusion that the Legislature, in using the word "periodical,” implicitly adopted the content regulations applicable to second-class mail in defining the word as it is used with respect to the exemption at issue here must be rejected.
Given the general definition of "periodical” as quoted above, to exclude petitioner’s publication from that definition would necessitate the adoption of some form of content regulation akin to that adopted to classify second-class mail. It is not, however, this Court’s role to adopt such content regulation. First, if the Legislature wishes there to be content regulation, it certainly can place such regulation into the statute. Indeed, the version of the statute created by 1953 PA 203 included content regulation in the exemption of periodicals of general circulation, requiring that they contain at least twenty percent local news matter. This requirement was removed when the section was rewritten in 1970. See 1970 PA 15. It is inappropriate for this Court to reinsert into the statute that which the Legislature saw fit to remove. *433Furthermore, any such regulation imposed by this Court would be arbitrary. While there may exist good reasons to require some nonadvertising content in a publication to qualify for the use tax exemption, that determination, as well as a determination of how much of that material must be contained in a publication to qualify for an exemption, is a matter which must be addressed by the Legislature, not this Court.
Respondent also argues that the Legislature, in adopting the 1986 amendment of the statute, drew a distinction between "periodicals” and "advertising supplements” by adding to the provisions relating to the exempt status of advertising supplements when included in exempt newspapers and periodicals. I do not, however, share respondent’s interpretation of the Legislature’s purpose in enacting the amendment. The reasons behind the 1986 amendment were discussed in a report by the House Legislative Analysis Section, House Legislative Analysis, HB 5291, January 23, 1986, which states in pertinent part:
The law exempts the sale of a newspaper or periodical from sales and use taxes. The statutes make reference to those newspapers and periodicals classified under federal postal laws and regulations as second class mail. Until recently the federal regulations included advertising supplements and the supplements were therefore exempt from state sales and use taxes. Even though changes in federal regulations have omitted references to advertising supplements, the Department of Treasury generally has continued to treat advertising supplements as tax exempt. Some people believe the practice should be specifically authorized in statute. Further, under the sales and use tax acts, the purchase or lease of industrial processing equipment generally is tax exempt, but tangible personal property used or consumed in *434printing which does not become a component part of the tax exempt newspaper or periodical is subject to taxation. Thus, some people believe that if advertising supplements are to be considered a "component part” of newspapers, an exception should be made for equipment used to print advertising supplements, so that persons printing the supplements would not lose the industrial processing exemption they now possess.
I do not believe that it was the intent of the Legislature in adopting the 1986 amendment either to clarify the definition of the word "periodical” or to draw distinctions between periodicals and advertising supplements. Rather, because of the statute’s use of federal postal regulations relating to second-class mail, changes in those regulations resulted in some items which had previously been treated as exempt as being potentially no longer exempt. The purpose of the amendment, therefore, was to restore the exemption status to those items. I attach no greater significance to the 1986 amendment than that.1
In the final analysis, neither respondent nor the Tax Tribunal provides any reason to conclude that petitioner’s publication does not constitute a "periodical.” Indeed, neither respondent nor the tribunal provides much of a definition of "periodical” other than the assertion that it must be something other than petitioner’s publication, being a loose assortment of advertising materials. I decline, however, to adopt a "we know it when we see it”2 *435standard for determining what is a periodical. Rather, the general definitions of the word should be consulted, which encompass petitioner’s publication. If respondent sees the need for a more restrictive definition of the word, it should approach the Legislature.
Indeed, this is precisely why I cannot join the majority’s decision. The majority, concluding that the word "periodical” should be read more narrowly than the dictionary definition, creates an amorphous definition that provides little guidance beyond the conclusion that Mailbox Values is not a periodical. The majority, with no citation of authority, concludes that the commonly understood meaning of "periodical” is something "similar to a magazine.” Ante at 425. In so doing, the majority adopts a "we know it when we see it” standard to read into the statute a content requirement which the Legislature specifically chose not to include. While the majority advances some strong policy reasons why petitioner’s publication should not enjoy tax-exempt status, reasons with which I do not necessarily disagree, these considerations should be left to the Legislature, which can amend the statute if it sees the need to do so. I would, therefore, affirm.3_

 It should also be noted that, strictly speaking, petitioner’s publication is not an advertising supplement. While it is advertising, it cannot be deemed a supplement since it is not included with any other newspaper or periodical. Since it supplements nothing, it cannot be an advertising supplement. Thus, the subject of the 1986 amendment, advertising supplements, does not directly bear on the issue before us.

 See Jacobellis v Ohio, 378 US 184, 197; 84 S Ct 1676; 12 L Ed 2d 793 (1964) (Stewart, J., concurring).

 The tribunal also concluded that petitioner’s publication was not entitled to tax-exempt status since it was not "of general circulation.” Since the majority does not reach this issue, I do not analyze it at length. I would, however, conclude that, in light of the large number of households which receive Mailbox Values, it enjoys "general circulation.”