Honigman Miller Schwartz and Cohn LLP v. City of Detroit, 505 Mich. 284

Summary

The Michigan Supreme Court held that “services rendered in the city” under MCL 141.623 of the Uniform City Income Tax Ordinance refers to services performed within the city, regardless of where the client is located or where the services are delivered. The Court reversed the Court of Appeals and remanded for further proceedings concerning Detroit’s income-tax assessment against Honigman Miller Schwartz and Cohn LLP for tax years 2010 through 2014.

Holdings

1. Under MCL 141.623, "rendered" means to do a service for another. Revenue from services rendered in Detroit is therefore sourced to the location where the services were performed, not where they were delivered or where the client was located.
2. Although "performed" and "rendered" have distinctive contextual connotations in the UCITO, they have essentially the same operative meaning for apportionment purposes: both focus on where the service was done or carried out.

Questions Presented

1. Whether the phrase "services rendered in the city" in MCL 141.623 requires revenue from legal services to be apportioned according to where the services were performed or where they were delivered to the client.
2. Whether the use of the terms "performed" in MCL 141.622 and "rendered" in MCL 141.623 requires the terms to have different meanings under the Uniform City Income Tax Ordinance.
3. Whether the Michigan Tax Tribunal properly granted partial summary disposition to the City of Detroit.

Disposition

reversed_and_remanded