Michigan Chamber Leads Effort on Legislation to Improve Taxpayer Access to Courts

April 27, 2015

The Michigan Chamber provided testimony last week on Senate Bill 100 (Brandenburg) to strengthen taxpayer rights and access to courts. Under current law, Michigan taxpayers who want to utilize Michigan’s Court of Claims for non-property state tax disputes face a significant barrier to entry: Michigan requires taxpayers to “pay-to-play” in order to enter this venue. This means that Michigan taxpayers must pay the total amount in dispute, including any interest and penalties. This presents a barrier to entry for many taxpayers, and also jeopardizes their due process rights. Additionally, many taxpayers who can “afford” to pre-pay the amount they protest are becoming reluctant to do so because it is becoming increasingly difficult for taxpayers to receive their rightful refunds from cases they’ve won as the state is hesitant to approve the payment of court ordered refunds, even though the judiciary has said that the state is not entitled to keep such funds.

SB 100 simply amends Michigan’s Revenue Act to eliminate this “pay-to-play” requirement, but rightfully maintains the requirement that taxpayers must pay the “uncontested portion” of an assessment (see MCL 205.22) before commencing any appeal, including an appeal to the Tax Tribunal.   

This legislation is about treating taxpayers fairly, better administration of the law and access to our courts. It is one of many over-due reforms that would improve the overall tax administration for all taxpayers.

For questions about this issue or other tax-related issues, please contact Tricia Kinley at tkinley@michamber.com or (517) 371-7669.