News & Insights

U.S. Supreme Court Speaks Regarding Retroactive Legislation Cases

Tax Development Jan 16, 2017

As we reported in our tax release dated December 1, 2016, five taxpayers have requested that the U.S. Supreme Court grant certiorari to determine if the retroactive repeal of the Multistate Tax Compact by the Michigan Legislature violated the U.S. Constitution. Dot Foods, Inc. has also requested the U.S. Supreme Court to determine whether a retroactive change to Washington’s Business and Occupation Tax violated the Due Process Clause of the Constitution.1 

On January 10, 2017, the U.S. Supreme Court requested that Michigan respond to the petitions filed with respect to the retroactive appeal of the Compact by February 9, 2017. The Court had planned to review the taxpayer petitions on January 19, 2017, but the review will now be postponed. In combination with the issuance of this request, the review of the Dot Foods case, which had been scheduled for January 19, 2017, has also been postponed

These developments are significant in that it appears that the Supreme Court has now linked the retroactive legislation cases. And, by asking for input from Michigan, it would appear that the Court is seriously contemplating hearing the cases. We expect to see some update to these proceedings later in February. A win for the taxpayer could mean refunds in both Michigan and Washington.

1 See Ryan release dated December 12, 2016.

TECHNICAL INFORMATION CONTACT:

Mary Bernard
Director
Ryan
401.272.3363
mary.bernard@ryan.com