CHICAGO — Michigan officials are asking the state's high court to reconsider a recent decision that could cost the state more than $1 billion in the current fiscal year.
The Michigan Supreme Court in July ruled 4-3 in favor of IBM in a dispute over corporate taxes. The case, IBM vs. Department of Treasury, turned on how out-of-state corporations that do business in Michigan are allowed to calculate their taxes.
The court's decision overturned earlier rulings by the court of claims and the Michigan Court of Appeals, both of which ruled in favor of the state.
It means IBM will be in line for a $6 million refund for 2008, rather than the $1.3 million calculated by the state. The state could be forced to pay up to $1.1 billion in total for other companies — up to 134 have filed claims — that could benefit from the ruling, budget officials said.
The state's treasury department last week asked for a stay on the ruling, and Attorney General Bill Schuette filed a motion seeking a re-hearing.
The current ruling "results in the state potentially owing a budget-busting aggregated tax refund in the hundreds of millions of dollars (not including interest) to mostly out of state corporations," Schuette said.
A budget spokesman told local reporters that the ruling could create a "significant problem for the budget," mainly in the current fiscal year.
