LANSING (AP) — A retroactive law that prevents more than $1 billion in tax refunds for out-of-state companies is not illegal, according to the Michigan Court of Appeals.
In December, Gov. Rick Snyder signed a law in response to a $6 million state Supreme Court decision in favor of IBM. Officials warned that the decision would make Michigan vulnerable to a flood of refund requests from dozens of companies.
The law “does not have a discriminatory purpose,” the appeals court said in a ruling issued Sept. 30.
“It is legitimate legislative action to both correct a perceived misinterpretation of a statute and eliminate a significant revenue loss resulting from that misinterpretation,” the court said in affirming a ruling from the Court of Claims.
The legal dispute involves tax liability for certain companies from 2008 through 2010 after a change in a business tax formula.
Companies vigorously fought to overturn the retroactive law, even arguing that it was unconstitutional because it hadn’t been printed and possessed by the House and Senate for five days. They also said their First Amendment rights were violated. The appeals court, however, found no violations.
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