Ending “Pay to Play” Court Prepayment of Liability

Date: June 17, 2015 Last Edit: December 30, 2015

Related Content: Victories State Michigan

NFIB Victories in Michigan!

Legislation
supported by NFIB and signed into law will end the “pay to play” policy of
requiring a small business to pre-pay the taxes, penalties and interest being
disputed with the Department of Treasury before they can even take their case before
the Court of Claims. The new law, Public Act 79 of 2015, will allow taxpayers
to withhold payment of the contested portion of their tax liability until the
court has decided their case. It also gives taxpayers 60 days to file an appeal
instead of 35.

While larger business may be able to afford the price of admission to
get their day in court, many small businesses do not have such a luxury. As a
result, Michigan’s Treasury Department had an incentive to bully small
businesses into settlement rather than deal equitably with the circumstances of
the case in question. We have seen this behavior in recent cases surrounding
the issue of cloud based software services that Treasury claims is a taxable
“product”. Although Treasury has lost at every level of court they continue on
in hopes of running the business out of money and forcing a settlement.

Such actions undermine the hard work of the legislature and Governor in
trying to improve Michigan’s overall business climate and send a clear “not
welcome here” signal to small companies and the jobs they provide. For these
reasons, Public Act 79 is a clear win for small business!

Related Content: Victories | State | Michigan

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