Judge: Clarification To Tax Formula Is Retroactive

LANSING, Mich. (AP) – A judge has upheld a new law clarifying that Michigan never intended to give out-of-state companies a lower tax liability in a 2007 tax overhaul.

Court of Claims Judge Michael Talbot says the Legislature was entitled to correct its own mistakes through retroactive legislation.

In September, Gov. Rick Snyder signed a law designed to ensure the state is not forced to pay $1.1 billion in refunds in 134 cases after a July ruling from the Michigan Supreme Court in a case involving IBM. State officials say they feared the court’s decision could affect other cases in the 2008, 2009 and 2010 tax years.

Talbot ruled Friday that the law is constitutional and “prevented significant fiscal harm to the state.” He issued opinions and orders favoring the state in 99 cases.

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