Whether the disallowed items were “materials & supplies” deductible from gross receipts under MCL 208.1113(6); The Business Tax Act (BTA); MCL 208.1201; MCL 208.1203; Statutory interpretation; Cook v. Department of Treasury; Ferguson v. City of Lincoln Park; Sun Valley Foods Co. v. Ward; Herman v. Berrien Cnty.; Griffith v. State Farm Mut. Auto Ins. Co.; Material & supplies defined; Ejusdem generis doctrine; Neal v. Wilkes; Whether plaintiff overstated compensation; MCL 208.1403(2); Compensation defined; MCL 208.1107(2); Wages, salaries & commissions defined; Taylor v. Laban; “Single items of income” concept; Michigan Tax Tribunal’s (MTT) failure to apply LaBelle Mgmt., Inc. v. Michigan Dep’t of Treasury; Unitary business group status

Discerning no error in the MTT order granting summary disposition in defendant-Department of Treasury’s (Department) favor and ordering plaintiff-Total Armored Car Services (TACS) to pay its tax liability with interest, the court affirmed. Following an audit, the Department determined that TACS had underpaid its taxes in three tax years. TACS filed a petition in the MTT, challenging the Department’s disallowance of certain deductions and credits, and later adding a claim that it should be treated as a lone tax unit rather than as a collective taxpayer. On appeal, TACS contended that the disallowed items were “materials and supplies” deductible from gross receipts under MCL 208.1113(6). “The auditor determined that ‘Materials and Supplies means tangible personal property,’ not services such as those reported by TACS. This is consistent with the plain language of MCL 208.1113(6).” The court held that the type of property included in the definition of “materials and supplies” is limited to tangible items. Given the plain language of MCL 208.1113(6), it found no error in the MTT’s dismissal of TACS’s challenge to the Department’s audit. The Department also determined that TACS overstated the compensation earned by employees regarding driving. Contrary to the MTT’s ruling, the phrase “compensation in this state” was not ambiguous. “When the definition of ‘compensation’ is inserted into the phrase ‘compensation in this state,’ it provides that the credit is available for ‘[remuneration for services or work performed] in this state.’” Following TACS’s proposal would require the court to add terms and conditions into the statute. “The statute makes no reference to the residency of the subject employees, nor does the definition of the specific words used. Ultimately, although the MTT’s reasoning was flawed, it reached the correct result.” Thus, TACS was not entitled to relief.