The plaintiff in case no. 140814, Midland Cogeneration Venture Limited Partnership (Midland), owns equipment in the city of Midland that is used to generate electricity, which is then resold. The property consists of twelve gas fired turbine generators, twelve heat recovery steam generators, two steam turbines, one back pressure steam turbine and related machinery and equipment. For tax year 2008, the Midland assessor classified the property as “industrial real property.” Midland Cogeneration objected and filed a protest of the classification with the local property tax Board of Review in March 2008, claiming that the property should be classified as industrial personal property. The Board of Review rejected that claim.
Midland Cogeneration appealed the board’s decision by filing a petition with the State Tax Commission. Under MCL 211.34c(6), the STC “shall arbitrate the petition based on the written petition and the written recommendation of the assessor and the state tax commission staff.” The STC considered the recommendations of the assessor, field staff, and the classification appeals hearing group. In two letters, an STC representative advised that the STC had determined that the property should be classified as industrial real property, because the taxpayer was a facility on leased land for utility purposes, which is properly classified as industrial real property under MCL 211.34c(3)(d)(v).
Midland Cogeneration filed suit in Midland County Circuit Court to appeal the STC’s decision, and also filed an appeal with the Tax Tribunal. The Tax Tribunal, on its own motion, dismissed the appeal for lack of jurisdiction. In the circuit court case, the defendants filed a motion for summary disposition, asking the court to dismiss Midland Cogeneration’s case. The court did not have subject matter jurisdiction over Midland Cogeneration’s complaint because MCL 211.34c(6) precludes an appeal, the defendants argued. But the circuit court ruled that § 34c(6) conflicts with Const 1963, art 6, § 28, which guarantees an appeal from administrative decisions. Based on MCL 209.105, the court held, the STC was obligated to issue a formal order. The court further concluded that the STC had a clear duty to reclassify the property. The court issued an order of mandamus requiring the STC to issue a formal order reclassifying the property as industrial personal property. The defendants appealed to the Court of Appeals.
In case nos. 140817-24, the plaintiffs – CVS Pharmacy, Inc., NES Rental Holdings, Inc., and Iron Mountain Information Management, Inc. – each own property subject to property tax assessment. They describe the property as machinery and equipment, furniture and fixtures that are located on industrial real property. All of the property in question was classified as commercial personal property by the assessor of the local taxing authority. The plaintiffs each petitioned the appropriate board of review to reclassify the property as industrial personal property. In each instance, the board denied the request. The plaintiffs individually petitioned the STC to reclassify the property. In letters sent to the parties, a representative of the STC advised that the STC had considered the recommendations of the assessor, field staff, and the classification appeals hearing group, and determined that the property should be classified as commercial personal property.
CVS filed an action in Oakland County Circuit Court seeking mandamus to have the STC issue a properly promulgated order and to have the court reverse the STC ruling on the merits. The circuit court issued an order of mandamus requiring the STC to issue a formal order reclassifying the property as industrial personal property.
NES and Iron Mountain filed actions in Wayne County Circuit Court and Washtenaw County Circuit Court respectively, seeking the same relief CVS had requested. The Washtenaw County court granted mandamus relief, and ordered the STC to issue a formal order reclassifying the property as industrial personal property. The Wayne County court granted mandamus relief, but declined to consider the merits of the cases. The defendants appealed each order to the Court of Appeals.
The Court of Appeals consolidated all the appeals and, in a published per curiam opinion, reversed the circuit courts in each case. The Court of Appeals held that MCL 211.34c(6) bars an appeal to the courts from the STC’s classification decisions. The Court of Appeals found no constitutional infirmity in this provision. Although the statute precludes appeal for the year of the petition, it does not preclude review by other mechanisms, such as filing for a refund once property taxes are paid and pursuing such a claim with the Tax Tribunal and then through the courts, the appellate panel reasoned. Based on its holding, the Court of Appeals found it unnecessary to consider the question of whether the letters were valid orders of the STC. The plaintiffs appeal.