City of Ann Arbor v. State Tax Commission

T. G. Kavanagh, J.

(dissenting). My colleagues accept the argument of the City of Ann Arbor that it is entitled to a hearing before the State Tax Commission in order to present evidence and argument that certain property should be added to the assessment rolls for the purpose of imposing a tax for previous years.

The basis for their conviction is stated:

"A reading of the commission’s decision letter indicates that it was necessary for the commission to consider and resolve factual questions before it could reach its final legal conclusion that the property was correctly listed as tax exempt. In such a situation we believe that the preferable procedure, and the procedure required by fairness and a reasonable construction of the statute, is for the commission to make its factual decision after it has provided the parties with an opportunity to fully develop their positions at a hearing.”

I agree that the holding of a hearing to provide the parties with an opportunity fully to develop their positions before the commission reaches its conclusion that the property is nontaxable is a "preferable procedure”, but such a procedure is not expressly provided in the statute and in my view it represents an impermissible construction of the statute to read it to do so.

The rule of construction of tax statutes has traditionally been to construe them strictly to favor the taxpayer. See Wyandotte v State Board of Tax Administration, 278 Mich 47; 270 NW 211 (1936); Standard Oil Co v Michigan, 283 Mich 85; 276 NW 908 (1937); Plymouth United Savings Bank v Plymouth Twp, 289 Mich 307; 286 NW 625 (1939).

In this case, construing the statute to require the State Tax Commission to hold a hearing before rejecting the taxing officer’s claim that the property is taxable favors the taxing officer, for there is no other way provided for taxing this property for the years in question apart from convincing the Tax Commission that the property was properly taxable.

The Legislature could have provided for such a hearing in order to foster taxation for previous years but it did not. It is not up to us to so provide however much we might prefer it.

I would affirm the Court of Appeals.