Sales-tax implications for medical marijuana providers; Michigan Medical Marihuana Act (MMMA); Medical Marihuana Facilities Licensing Act (MMFLA); General Sales Tax Act (GSTA); Catalina Mktg Sales Corp v Department of Treasury; “Costs associated with assisting”; MCL 333.26424(f); “Assisting,” “service,” & “costs”; “Sale at retail” or “retail sale”; MCL 205.51(1)(b); “Tangible personal property”; MCL 205.51a(r); Reliance on a 2011 letter from the then-Deputy Treasurer; Equal Protection Clauses in the Michigan & U.S. Constitutions; The Uniformity of Taxation Clause in the Michigan Constitution; Denial of plaintiff’s summary disposition motion

[This opinion was previously released as an unpublished opinion on 03/25/25.] The court found that the Court of Claims did not err when it held that the MMMA and MMFLA, together with the GSTA, made clear that plaintiff was required to pay sales tax. In addition, given “the plain terms of the MMMA and MMFLA, as well as the undisputed contents of the 2011 letter” from the then-Deputy Treasurer, plaintiff “failed to establish that it reasonably relied on the 2011 letter in deciding not to pay sales tax in 2017.” Further, defendant-Treasury Department did not violate the Equal Protection Clauses or the Uniformity of Taxation Clause. Finally, the court found that remand was unnecessary. The case concerned the sales-tax implications for medical marijuana providers. Plaintiff argued “that the Treasury and trial court misconstrued MCL 333.26424(f) to be a tax exemption for caregivers when it is, in fact, a decriminalization provision. According to plaintiff, there are no exceptions from, or other provisions pertaining to, sales tax under either the MMMA or MMFLA, and, because the statutes are silent on the issue, it is necessary to apply the test” in Catalina “to determine whether plaintiff is liable for such tax.” The court did not find this argument convincing. The Treasury Department “reasoned that, under the GSTA, MMMA, and MMFLA, ‘[t]he retail sales of marihuana and marihuana-derived products by a provisioning center are subject to sales tax[,]’ but that ‘[a]ny such compensation [received by a primary caregiver as a cost of assisting a patient under MCL 333.26424(f)] does not constitute the sale of controlled substances[,]’ and is thus ‘a non-taxable service and not subject to sales tax.’” The court saw “no cogent reason to overrule this interpretation.” It noted that “the Legislature has indicated that primary caregivers provide a nontaxable service, while provisioning centers do not.” Additional evidence of “intent can be found in the Legislature’s use of the word ‘cost.’ As such, the Court of Claims properly looked to the dictionary definition of the term for its plain and ordinary meaning.” Plaintiff also argued “primary caregivers ‘can charge whatever price they choose,’ and that, therefore, the MMMA ‘does not, in reality or intent, constrain caregivers to only recover out-of-pocket costs.’” However, the “statute permits primary caregivers to recoup costs—nothing more.” The court then turned “to whether the MMMA’s tax-exemption provision for primary caregivers applies to plaintiff.” It found that plaintiff’s “attempt to analogize its operations to those of primary caregivers does not change the fact that the Legislature did not provide a sales-tax exemption for provisioning centers. Therefore, plaintiff is not entitled to the tax exemption the MMMA provides to primary caregivers for recouping costs.”