Michigan law prohibited parties from participating in motor vehicle finance unless they were a either an installment dealer of automobiles or a finance company.
Because the finance company was within the scope of businesses who could participate in a retail sales finance contract for automobiles, and it did so in direct cooperation with its affiliated dealers, it was acting as part of a joint venture in the sale of the automobiles. Therefore, it was one of the entities contemplated as a taxpayer under the Michigan General Sales Tax Act.
Though the statutory language changed after the events in Daimler Chrysler, it still encompassed parties participating in any part of the retail transaction. Given that the majority of car sales involve finance companies, it is clear that a finance company would be a foreseeable, perhaps even an expected part of a retail automobile sales contract. Furthermore, the finance contract was certainly within the scope of the finance company's ordinary business, which was to provide financing for retail automobile sales. In addition, because the finance company worked exclusively with its own affiliated dealerships, it is clear that the dealerships and the finance companies were working together as a unit for the automobile retail sales. Most importantly, because the tax was aimed at all persons and businesses engaged in retail sales, the applicability of the tax ultimately rests on whether the finance company was an entity engaged in retail sales. Clearly, the entire purpose...
The finance company is considered a taxpayer under the Michigan General Sales Tax Act.
MCL 205.51 1(h). Retrieved July 12, 2008, from Michigan Legislature
Web site: (http://www.legislature.mi.gov/(S (0gdhcgv2es2k1g45xd5zez55))/mileg.aspx?page
GetObject&objectname=mcl-205-51
MCL 205.52 2(2)-. Retrieved July 12, 2008 from Michigan Legislature
Web site: (http://www.legislature.mi.gov/(S (0gdhcgv2es2k1g45xd5zez55))/mileg.aspx?page
GetObject&objectname=mcl-205-52
MCL 205.52 2(1). Retrieved July 12, 2008 from Michigan Legislature
Web site: (http://www.legislature.mi.gov/(S (0gdhcgv2es2k1g45xd5zez55))/mileg.aspx?page
GetObject&objectname=mcl-205-52
Daimler Chrysler Services North America LLC v. Department of Treasury, Michigan Court of Appeals, No.
(2006). Retrieved July 12, 2008 from Michigan Court of Appeals. Web site: http://courtofappeals.mijud.net/DOCUMENTS/OPINIONS/FINAL/COA/20060725_C264323_49_122O.264323.OPN.COA.PDF
Id., citing MCL 492.101 et seq.
