Plaintiff is in
the business of selling and leasing container recycling machines, which are
commonly located in grocery stores for use by customers to return bottles and
cans for recycling. Plaintiff and the
Department of Treasury dispute whether plaintiff is required to pay sales and
use tax for container recycling machines that plaintiff sells and leases to its
Michigan customers. The dispute requires
a determination whether plaintiff’s container recycling machines are used in an
“industrial processing activity,” which would mean that an industrial
processing exemption applies under either the General Sales Tax Act (GSTA), MCL
205.54t, or the Use Tax Act (UTA), MCL 205.94o.
The Court of Claims granted summary disposition to the defendant, holding
that the container recycling machines are not used in an industrial processing
activity, so plaintiff is not entitled to the statutory exemption. In a split published opinion, the Court of
Appeals reversed and remanded for further proceedings. The Supreme Court has granted the defendant’s
applications for leave to appeal.