The Michigan Tax Tribunal ruled in favor of the state’s Department of Treasury in a case in which Frito-Lay Inc. filed a petition so it could retain a tax exemption claim despite not paying a fee by the deadline.
There was no dispute of the facts between the parties, Judge Jason C. Grinnell wrote in an opinion released Thursday. Frito-Lay admitted to not paying its Essential Services Assessment fee on time but said the payment process was changed, causing confusion. Additionally, the corporation said, turnover in the property tax department and the pandemic were other factors that caused it to miss its deadline.
However, Frito-Lay received multiple notices about the fee and was warned about its Eligible Manufacturing Personal Property Tax Exemption claim being potentially rescinded, the tribunal said. Plus, the company signed and acknowledged its obligation to pay the fee when filing its tax exemption claim. The tribunal said the Treasury was mandated to rescind the exemption as required by law given the circumstances.
“Simply put, Respondent’s uncontroverted evidence, legal authority, and legal analysis, dispositively establishes that Petitioner did not pay the full ESA,” said the tribunal.
The company didn’t file a response to the Treasury’s motion for a summary disposition. The court could rule by summary disposition since no facts were being disputed by either party.
Frito-Lay may contest and ask the Tribunal for reconsideration or try to appeal the case with the Michigan Court of Appeals.
The company was represented by Matt Welch of George McElroy & Associates Inc., and the state Treasury was represented by Wesley Margeson of the Michigan Attorney General’s Office.
“The Michigan Department of Treasury is committed to the consistent and fair application of state law,” a spokesperson for the Treasury said. “We are satisfied with the Michigan Tax Tribunal decision.”
Frito-Lay did not immediately respond to a request for comment.
The case is Frito-Lay, Inc. v. Mich. Dep’t of Treasury, Mich. Tax Trib., No. 21-003926, 6/28/22.