Ford Motor Company v. State Tax Commission

Summary

The Michigan Supreme Court reviewed consolidated appeals concerning whether engine-testing test cells and an engine production line qualified for an air-pollution-control tax exemption under Part 59 of Michigan’s Natural Resources and Environmental Protection Act. The Court held that qualifying equipment must be installed or acquired primarily to control or dispose of air pollution and must physically control, capture, and remove pollutants. It reversed the Court of Appeals as to the test cells, reinstated the State Tax Commission’s denials, and affirmed the denial for Detroit Diesel’s engine line and the rejection of its due-process claim.

Holdings

1. The test cells do not qualify for the part 59 tax exemption. To qualify, equipment must be installed or acquired for the primary purpose of controlling or disposing of air pollution and must be designed and operated primarily for the control, capture, and removal of pollutants from the air. The equipment must itself physically perform those pollution-control functions; equipment used primarily to test or manufacture less-polluting engines does not satisfy the statute.
2. The Equinox engine production line does not qualify for a part 59 tax exemption because its primary purpose was manufacturing engines for sale, not controlling or disposing of air pollution.
3. Detroit Diesel received constitutionally adequate due process because it received notice and a full opportunity to present evidence and legal argument at a hearing before an impartial decision-making process.

Questions Presented

1. Whether automotive emissions test cells qualify as tax-exempt air-pollution-control facilities under MCL 324.5901 and MCL 324.5903.
2. Whether Detroit Diesel's Equinox engine production line qualifies as a tax-exempt facility under part 59 of NREPA.
3. Whether the State Tax Commission's hearing process deprived Detroit Diesel of due process.
4. Whether part 55 of NREPA limits the part 59 exemption to facilities controlling pollution from stationary sources.

Disposition

other