Michigan Can Tax All Energy Produced in State, Justices Rule

A CMS Energy Corp. unit isn’t entitled to a $7.8 million Michigan income tax refund because the state may tax 100% of its sales of electricity produced there regardless of where it’s ultimately purchased, a state appeals court ruled Tuesday.

CMS asked the Michigan Court of Appeals to overturn a state tax tribunal ruling that an intermediary—the Midcontinent Independent System Operator—accepts delivery within Michigan of 100% of the company’s energy, rather than looking to the location of the end-users.

The statute’s reference to “any purchaser” means that a sale must be sourced to the first purchaser “rather than following the ...