State Tax Day - Current, S.3, Michigan—Sales and Use Tax: Maintenance of Ambient Temperature Did Not Qualify For Industrial Processing Exemption, (Sep 8, 2026)

A Michigan industrial processor could not claim a 100% industrial processing (IP) sales tax exemption for utilities purchased to maintain a certain temperature for its machinery. The exemption statute states that the "design, construction, or maintenance of production or other exempt machinery, equipment, and tooling" are exempt IP activities. The associated-words canon of statutory interpretation requires that there is commonality among "design, construction, and maintenance". As both "design" and "construction" are active processes, the tribunal held that "maintenance" must also require an active process. The taxpayer's interpretation of "maintenance," however would be contrary to the associated-words canon in that it would include the passive process of maintaining an ambient temperature alongside two active processes (design and construction). The tribunal clarified that its interpretation of maintenance does not exclude preventative maintenance from exemption.

Northeastern Fabrication LLC v. Department of Treasury, Michigan Tax Tribunal, No. 25-000335, September 2, 2026, ¶402-787