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Michigan Supreme Court Lansing, Michigan 48909 ______________________________________________________________________________ ______________
Chief Justice Justices

Elizabeth A. Weaver

Opinion
PEOPLE OF THE STATE OF MICHIGAN,
Plaintiff-Appellee,
v RUDOLFO G. RODRIGUEZ, JR.,
Defendant-Appellant.
________________________________ PER CURIAM


Micha el F. Cavana gh Marilyn Kelly Cliffor d W. Taylor Maura D. Corrigan Robert P. Young, Jr. Stephen J. Markman

____________________________________________________________________________________________________________ ________________

FILED DECEMBER 27, 2000


No. 115939


The defendant has been convicted of tax evasion, for
failure to pay use tax on several motor vehicles. The Court


of Appeals affirmed. We reverse the judgments of the Court of
Appeals and the circuit court because the circuit court failed
to instruct the jury regarding a statutory exemption to the
tax.
I


The defendant lived in Hudson and owned carpeting stores
in Adrian and Hillsdale. vehicles. He also bought and sold used


He knew an automobile dealer in Texas who allowed


him to use some of that dealership's temporary permits. While
there was no fixed pattern to his purchases and sales, the
defendant typically would buy a vehicle at auction in Ohio,
place the Texas permit on it, and bring it back to Michigan.
Here, he would repair the vehicle, and then sell it, again at
auction.
A tax investigation led to the present charges. The


defendant faced six felony counts of evading the use tax1 owed
on six vehicles. MCL 205.27(2); MSA 7.657(27)(2). They


included (a) a 1985 one-ton Ford cube van that was painted
with the name of the defendant's carpet business, (b) a 1988
Pontiac Bonneville that was titled in the name of the


defendant's wife and that she sometimes drove, (c) a 1988
Chevrolet van that police found hooked to a trailer that
contained carpeting for the defendant's business, (d) a 1978
Jaguar, (e) a 1984 Mazda 626, and (f) a 1985 Chevrolet Blazer.


The Use Tax Act is MCL 205.91 et seq., MSA 7.555(1) et
seq. The use tax is designed to complement the sales tax. It
applies to certain personal property transactions in which the
seller does not collect a sales tax on behalf of the state.
The sale of a motor vehicle by one private individual to
another is one of the most common circumstances to which the
use tax applies. The purchaser must pay the tax-six
percent, the same the sales tax-in order to obtain a
certificate of title. The tax is imposed by MCL 205.93(1);
MSA 7.555(3)(1). Further, the Motor Vehicle Code requires
payment of the use tax as a condition of obtaining a vehicle
title. MCL 257.814; MSA 9.2514.
2


1

This

case

was

tried

in

January

1997.

The

jury's


conclusion was that the defendant was guilty of one felony
count, for evading the use tax on the Ford cube van. The


jurors also found him guilty of misdemeanor counts for evading
the tax on the Bonneville and the Chevy van. MSA 7.657(27)(4). They acquitted him MCL 205.27(4);
of the charges


pertaining to the other three vehicles.
The defendant was fined and placed on probation. He


appealed his convictions, but the Court of Appeals affirmed.
236 Mich App 568; 601 NW2d 134 (1999).2 dissented.
The defendant has filed a delayed application for leave
to appeal in this Court.
II
The defendant raises three issues in this Court. Two
Judge SMOLENSKI


have merit, and require that we remand this case to the
circuit court for a new trial.
A
The defendant's theory of the case was that he acquired
the vehicles with the intent to hold them just long enough to
do necessary repairs and then to resell them. believed himself which to fall within from the MCL use He therefore
MSA


205.94(c); tax

7.555(4)(c),

exempts

"[p]roperty


Reh den, unpublished order entered October 7, 1999
(Docket No. 202538).
3


2


purchased for resale."3
The defendant asked the circuit court to instruct the
jury regarding the exemption stated in MCL 205.94(c); MSA
7.555(4)(c).4 The court refused the request, agreeing with


the Attorney General5 that the "resale" exemption applied only
to persons who held Michigan dealer licenses. The court came


to this conclusion on the basis of the language in the first
MCL 205.94; MSA 7.555(4) provides that "[t]he tax
levied . . . does not apply" to several categories of
property. One is described in subsection (c):
Property purchased for resale, demonstration
purposes, or lending or leasing to a public or
parochial school offering a course in automobile
driving except that a vehicle purchased by the
school shall be certified for driving education and
shall not be reassigned for personal use by the
school's administrative personnel. For a dealer
selling a new car or truck, exemption for
demonstration purposes shall be determined by the
number of new cars and trucks sold during the
current calendar year or the immediately preceding
year without regard to specific make or style
according to the following schedule of 0 to 25, 2
units; 26 to 100, 7 units; 101 to 500, 20 units;
501 or more, 25 units; but not to exceed 25 cars
and trucks in 1 calendar year for demonstration
purposes. Property purchased for resale includes
promotional merchandise transferred pursuant to a
redemption offer to a person located outside this
state or any packaging material, other than
promotional merchandise, acquired for use in
fulfilling a redemption offer or rebate to a person
located outside this state.
Other exemptions are stated in MCL 205.93(3); MSA 7.555(3)(3)
and MCL 205.94; MSA 7.555(4).
Each side submitted a set of proposed jury
instructions. The defendants' included an instruction that
"the defendant is exempted from the use tax if the vehicle was
purchased for resale or for demonstration purposes."

5 4
3

The Attorney General prosecuted this case.
4


sentence

of

a

different

subsection,

MCL

205.93(2);

MSA


7.555(3)(2).6

That sentence provides:


The tax imposed by this section for the
privilege of using, storing, or consuming a
vehicle, ORV, mobile home, aircraft, snowmobile, or
watercraft shall be collected before the transfer
of the vehicle, ORV, mobile home, aircraft,
snowmobile, or watercraft, except a transfer to a
licensed dealer or retailer for purposes of resale
that arises by reason of a transaction made by a
person who does not transfer vehicles, ORVs, mobile
homes, aircraft, snowmobiles, or watercraft in the
ordinary course of his or her business done in this
state.


6


The tax imposed by this section for the
privilege of using, storing, or consuming a
vehicle, ORV, mobile home, aircraft, snowmobile, or
watercraft shall be collected before the transfer
of the vehicle, ORV, mobile home, aircraft,
snowmobile, or watercraft, except a transfer to a
licensed dealer or retailer for purposes of resale
that arises by reason of a transaction made by a
person who does not transfer vehicles, ORVs, mobile
homes, aircraft, snowmobiles, or watercraft in the
ordinary course of his or her business done in this
state. The tax on a vehicle, ORV, snowmobile, and
watercraft shall be collected by the secretary of
state before the transfer of the vehicle, ORV,
snowmobile, or watercraft registration. The tax on
a mobile home shall be collected by department of
commerce, mobile home commission, or its agent
before the transfer of the certificate of title.
The tax on an aircraft shall be collected by the
department of treasury. Notwithstanding any
limitation contained in [MCL 205.92; MSA 7.555(2)],
the price tax base of any vehicle, ORV, mobile
home, aircraft, snowmobile, or watercraft subject
to taxation under this act shall be not less than
its retail dollar value at the time of acquisition
as fixed pursuant to rules promulgated by the
department.
This is the language of the statute as it read at the time of
these events. In 1999 PA 117, the Legislature changed the
third sentence, so that it names the Department of Consumer
and Industry Services rather than the Department of Commerce.
5


The court's refusal to give the requested instruction
limited defense counsel to arguing that the defendant had not
intended to evade the use tax.
The Court of Appeals majority agreed with the circuit
court that the instruction need not be given. It said that


the exemption stated in MCL 205.94(c); MSA 7.555(4)(c) was
inapplicable to this case because MCL 205.93(2); MSA


7.555(3)(2) is more specific, and thus controls. 236 Mich App
572.
This analysis failed to persuade the dissenting judge in
the Court of Appeals, who wrote:
I disagree with the majority's conclusion that
defendant could not take advantage of the resale
exemption in MCL 205.94(c); MSA 7.555(4)(c) . . .
because the more specific section for vehicle
transfers, MCL 205.93(2); MSA 7.555(3)(2) . . .
applied. On the contrary, I conclude that [MCL
205.94(c); MSA 7.555(4)(c)], which creates a
separate tax exemption for property purchased for
resale, specifically applies to defendant's
transactions. I further conclude that the trial
court erred in failing to instruct the jury that
defendant was exempt from paying use tax if he
intended to resell the vehicles pursuant to the
specific exemption set forth in [MCL 205.94(c); MSA
7.555(4)(c)]. [236 Mich App 574.]
The meaning of these statutory provisions "is a question
of law that we decide de novo. People v Burgenmeyer, 461 Mich


431, 436, n 10; 606 NW2d 645 (2000); People v Morey, 461 Mich
325, 329-330; 603 NW2d 250 (1999)." In re Investigation of


1999 Riots, 463 Mich 378, 383; 617 NW2d 310 (2000).
We agree with the dissenting judge. MSA 7.555(4)(c), the Legislature 6
In MCL 205.94(c);
in clear and


provided

unambiguous language an exemption for property purchased for
resale. The reliance by the Court of Appeals majority on MCL
MSA 7.555(3)(2) was misplaced. The latter


205.93(2);

provision spells out such details as the time of payment and
the identity of the payee.
The Attorney General argues that the MCL 205.94(c); MSA
7.555(4)(c) and MCL 205.93(2); MSA 7.555(3)(2) "are


complements of one another and are intended to provide the
same exemption for licenced dealers who purchase vehicles for
the purpose of resale." Otherwise, "a person could buy


vehicles out of the state, tax-free, and bring them into
Michigan and never pay taxes on the vehicles in Michigan,
arguing that he intended to resell it eventually, perhaps
50,000 or 100,000 miles later." First, in enacting the Two responses are apparent.
of MCL 205.94(c); MSA


language

7.555(4)(c), the Legislature did not restrict the "purchased
for resale" exemption to dealers. Second, the plain meaning


of the phrase "purchased for resale" conveys a legislative
intent inconsistent with purchase for another purpose.
With regard to transactions exempt from the use tax,
Judge SMOLENSKI is correct that MCL 205.94(c); MSA 7.555(4)(c)
provides the specific and controlling language. Under that


provision, the defendant was-if a properly instructed jury
were to believe his version of the facts-exempt from the tax.
B
The Legislature has mandated that a trial court "instruct
7


the jury as to the law applicable to the case."

MCL 768.29;


MSA 28.1052. The court's obligation to instruct on a proposed
defense was described in People v Mills, 450 Mich 61, 80-81;
537 NW2d 909 (1995):7
A criminal defendant has the right to have a
properly instructed jury consider the evidence
against him. People v Vaughn, 447 Mich 217; 524
NW2d 217 (1994); People v Lewis, 91 Mich App 542;
283 NW2d 790 (1979). However, a trial court is not
required to present an instruction of the
defendant's theory to the jury unless the defendant
makes such a request. People v Wilson, 122 Mich App
1, 3; 329 NW2d 513 (1982). Further, when a jury
instruction is requested on any theories or
defenses and is supported by evidence, it must be
given to the jury by the trial judge. People v
Rone (On Remand), 101 Mich App 811; 300 NW2d 705
(1980). A trial court is required to give a
requested instruction, except where the theory is
not supported by evidence. People v Stubbs, 99
Mich App 643; 298 NW2d 612 (1980); People v Staph,
155 Mich App 491; 400 NW2d 656 (1986).
In the present case, the statutory exemption would apply
if the evidence introduced by the defendant were believed by
the jury, and thus the circuit court erred in failing to give
the requested instruction. There remains, however, the


question whether this error was harmless.
C
A chart outlining the principles governing an inquiry
into harmless error is set forth in People v Carines, 460 Mich
750, 774; 597 NW2d 130 (1999). As one can readily see from


that page of Carines, nonconstitutional preserved error is
evaluated under the standard set forth in People v Lukity, 460

7

Judgment order modified 450 Mich 1212 (1995).
8


Mich 484; 596 NW2d 607 (1999).

In Lukity, we quoted our


statement in People v Mateo, 453 Mich 203, 211; 551 NW2d 891
(1996), that MCL 769.26; MSA 28.1096 "should be viewed as a
legislative directive to presume the validity of verdicts."
In light of that presumption, we said in Lukity:
[MCL 769.26; MSA 28.1096], with its rebuttable
presumption, clearly places the burden on the
defendant to demonstrate that a preserved,
nonconstitutional error resulted in a miscarriage
of justice. [460 Mich 493-494.]
and
[T]he bottom line is that [MCL 769.26; MSA
28.1096] presumes that a preserved,
nonconstitutional error is not a ground for
reversal unless "after an examination of the entire
cause, it shall affirmatively appear" that it is
more probable than not that the error was outcome
determinative. [460 Mich 495-496.]
These principles were further refined in People v Snyder,
462 Mich 38, 45; 605 NW2d 831 (2000), and People v Elston, 462
Mich 751-766; 614 NW2d 595 (2000). As we explained in Elston:


In order to overcome the presumption that a
preserved nonconstitutional error is harmless, a
defendant must persuade the reviewing court that it
is more probable than not that the error in
question was outcome determinative. People v
Lukity, 460 Mich 484, 495-496; 596 NW2d 607 (1999).
An error is deemed to have been "outcome
determinative" if it undermined the reliability of
the verdict. See People v Snyder, 462 Mich 38, 45;
605 NW2d 831 (2000), citing Lukity, supra at 495 496. In making this determination, the reviewing
court should focus on the nature of the error in
light of the weight and strength of the untainted
evidence. See Lukity, supra at 495; People v
Mateo, 453 Mich 203, 215; 551 NW2d 891 (1996).
[462 Mich 766.]
Under the standard set forth in Lukity and Elston, the
9


error in this case was not harmless.

The jury received no


instruction on an exception to the use tax statute that was
crucial to the defendant's defense and was clearly supported
by the evidence. There is no question that the error


undermined the reliability of the verdict, and thus was
"outcome-determinative" under Lukity and Elston.
III
The Assistant Attorney General objected during defense
counsel's closing argument. In the course of ruling on the


objection, the circuit court (referring to the defendant) told
the jury, "he's subject to the tax." That statement was made


during the following discussion by the attorneys and the
court:
[Defense Counsel]: . . . The unrefuted
testimony is that every single one of these other
vehicles at some point-nobody knows for sure when
or where-were sold at auction, either in this
State or in another state, and as long as it is a
dealer-to-dealer transaction, the sales use [sic]
tax doesn't apply. That's the purpose of being a
dealership, and, therefore, it's when the ultimate
consumer-that's what a sales tax is all about.
It's when the ultimate consumer gets it, and that's
why it's on the cash register tape if there's a
sales tax on it. When it goes from wholesale to
retail, that's the point at which the duty to pay
taxes applies.
[Assistant Attorney General]: Objection, Your
Honor. It's-that part I'm not going to say that's
part [sic] a misstatement of the law. It's not the
statement of law that's applicable here because of
the Defendant's lack of being a dealer, and, so,
therefore, it . . .
[Defense Judge.
Counsel]: That's his argument,


10


[Assistant Attorney General]: shouldn't go to this jury.


.

.

.

it


The Court: No, that-that's true. That's
not applicable to a nondealer, and Defendant is a
nondealer.
[Defense Counsel]: I understand, I have a-I have argued, and there is no any witness for the Prosecution dealer-that his Texas dealer tags were Michigan. Nobody testified . . .
The Court: Judge, but
proof from
that his
invalid in


He's not a Michigan dealer.
I understand he's . . .


[Defense Counsel]: The Court:

Counsel, I've ruled.
I understand he's not a


[Defense Counsel]: Michigan dealer.


The Court: He's not a Michigan dealer, and
that means he's subject to the tax.
[Defense Counsel]: The Court: Judge, that . . .


Counsel, I have ruled.
Your Honor, I believe that


[Defense Counsel]: that is wrong.


The Court: You may believe it's wrong all you
want, but it is the law of this State, and you're
to follow it in your argument. [Emphasis
supplied.]
At the next recess, defense counsel moved for a mistrial.
One of his several grounds was that the court's statement that
the defendant was subject to the tax "is a direct violation of
the province of the Court and the jury and is, in effect,
directing a verdict of guilt." The court denied the motion.


The Court of Appeals majority likewise denied relief,
interpeting the circuit court's statement as an instruction
11


regarding

the

proper

application

of

MCL

205.93(2);

MSA


7.555(3)(2).

236 Mich App 573.

The majority added, "we do


not find that the trial court's instruction to the jury that
the exemption did not apply amounted to a directed verdict of
guilt." 236 Mich App 574.
Judge


Again, we find the dissent to be more persuasive. SMOLENSKI wrote:


I also disagree with the majority's
interpretation of the trial court's statement in
the presence of the jury that defendant was "not a
Michigan dealer, and that means he's subject to the
tax," as an instruction to the jury that the
exception set forth in [MCL 205.93(2); MSA
7.555(3)(2)] did not apply because defendant was
not a Michigan dealer. "There is a difference
between commenting on the evidence and making a
finding of fact for the jury." People v Reed, 393
Mich 342, 351; 224 NW2d 867 (1975). When the court
made this statement, it invaded the province of the
Id. at 351. Furthermore, if the trial
jury. court's statement is construed to be an
instruction, then the court committed an error
requiring reversal because it instructed the jury
that an essential element of the criminal offense
exists as a matter of law. Id. at 349-351; People
v Tice, 220 Mich App 47, 54; 558 NW2d 245 (1996).
[236 Mich App 574-575.]
Because the instructional error discussed in part II of
this opinion compels us to reverse the defendant's convictions
and remand this case for a new trial, we will not extend our
discussion of this second issue. For the reasons stated by


the dissenting judge in the Court of Appeals, however, the
proceedings on remand must be free of a judicial statement to
the jury resolving the central question of the defendant's
obligation to pay the disputed tax.


12


IV
For the reasons stated in part II of this opinion, we
reverse the judgments of the Court of Appeals and the circuit
court, and we remand this case to the circuit court for a new
trial. MCR 7.302(F)(1).


WEAVER, C.J., and TAYLOR , CORRIGAN , YOUNG , and MARKMAN , JJ.,
concurred.
CAVANAGH and KELLY , JJ., concurred in the result only.


13


People v Rodriguez


Jennifer M. Granholm, Attorney General, Thomas L. Casey,
Solicitor General, John D. O'Hair, Prosecuting Attorney, and
K. Naomi Lim, Assistant Attorney General [1200 Sixth Street,
Suite 1500, Detroit, MI 48226] [(313) 256-2352], for the
people.
Hugh M. Davis, Jr. [719 Griswold, Suite 1630, Detroit, MI
48226] [(313) 961-2255], for the defendant.


1




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