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STATE OF MICHIGAN
COURT OF APPEALS


HERALD WHOLESALE, INC. Plaintiff-Appellant, v DEPARTMENT OF TREASURY, Defendant-Appellee.

FOR PUBLICATION July 6, 2004 9:10 a.m. No. 245644 Court of Claims LC No. 02-000002-MT Official Reported Version

Before: Murray, P.J., and Neff and Donofrio, JJ. NEFF, J. Plaintiff Herald Wholesale, Inc., appeals as of right an order of the Court of Claims granting defendant Department of Treasury summary disposition and upholding the defendant's assessment of tax under the Single Business Tax Act (SBTA),1 MCL 208.1 et seq., for compensation paid to officer-employees under a client services agreement. We reverse. I This appeal presents the unusual situation of requiring this Court to answer a narrow question of statutory interpretation under the SBTA that has already been expressly and specifically answered by the Legislature through amending legislation, 2002 PA 603. The question is whether plaintiff must include in its single business tax (SBT) tax base, compensation paid to two corporate officer-managers by Amstaff, Inc.,2 a human resource management services company used by plaintiff. MCL 208.4(4), as amended by 2002 PA 603, makes it clear that such compensation shall not be included in the tax base of the managed corporation, e.g., plaintiff, but instead shall be included in the SBT tax base of the human resource management services company ("professional employer organization").

1

The Legislature has repealed the SBTA effective for tax years beginning after December 31, 2009. 2002 PA 531, enacting

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Michigan Law