The General Sales Tax Act (GSTA); MCL 205.52(1); “Sale at retail” (MCL 205.51(1)(b)); Resale exemption; Andrie Inc v Department of Treasury; Documentation required by MCL 205.68(1); Whether the dental prosthesis exemption (MCL 205.54a(1)(r)) was properly pled; Dental lab status; MCL 333.16643 & 333.16647; Consideration of exhibits attached to a summary disposition motion; Barnard Mfg Co, Inc v Gates Performance Eng’g, Inc; Sufficiency of an affidavit; Personal knowledge; MRE 602 & 901(a); “Hearsay”; MRE 803(6) exception; Due process; Standard of review for a MCR 2.116(C)(10) motion

The court rejected plaintiff’s argument “that the trial court improperly relied on inadmissible evidence in granting” defendant-Department of Treasury’s summary disposition motion. It also disagreed with its claim that the material facts showed it was entitled to an exemption from the GSTA. Thus, it affirmed summary disposition for defendant. “While most of plaintiff’s products were tax-exempt dental prostheses, defendant’s auditor determined that some, including ‘bite splints, bleaching trays, and sport guards,’ were subject to the sales tax.” Defendant assessed sales taxes, penalties, and interest for tax years 2017 and 2018. The court first addressed plaintiff’s evidentiary challenges to the trial court’s ruling. It disagreed that the trial court relied on hearsay. It found that the MRE 803(6) exception applied to the audit report, noting that the “report was not generated in anticipation of litigation, but was prepared prior to the informal conference.” Further, the trial court did not deny plaintiff due process in granting the MCR 2.116(C)(10) motion. It “did not overstep by analyzing the evidence the parties provided, analyzing what the law requires, and noting the gaps that existed.” As to the exemption issue, the court noted that to receive an exemption from the GSTA, “a seller must provide evidence that the sales tax is being ultimately collected on the sales. The trial court correctly ruled that plaintiff failed to do” so. It contended that “none of its sales fit the definition in MCL 205.51(1)(b), as they fell under the resale exemption from the sales tax[.]” While it did not dispute that there were gaps in the information it provided, it claimed that “any of the missing state tax identification numbers involved customers who did not have them, and therefore MCL 205.68(1) required nothing of plaintiff” as to them. However, if the dentists that it “was selling these prostheses products to were unlicensed retail sellers, MCL 205.68(3) explicitly puts the sales tax back on the original seller when knowingly selling to an unlicensed retail seller.” Finally, while plaintiff correctly asserted it was “a dental laboratory, this does not totally exempt [it] from the obligation to collect sales tax.”