In 1995, the state of Michigan changed the law pertaining to the treatmentof capital acquisition deductions by multi-state taxpayers commencing withtax year 1997.The Michigan Legislature recognized that the statutory change might besubject to attack on constitutional grounds as a violation of the U.S. Constitution's Commerce Clause and took the unprecedented action ofincorporating specific 'fall back rules,' said the company.
The constitutionality of the state's position has been and is currentlybeing vigorously challenged by a number of taxpayers including the JeffersonSmurfit Corp., said Ramco-Gershenson officials.The company paid the additional tax totaling $1.146 million for the years inquestion, 1999, 2000 and 2001, recorded it as a receivable and filed aprotective claim requesting a refund with the State of Michigan.
In late January, the company was advised by legal counsel that the MichiganSupreme Court elected not to review the appellate court's decision tooverturn a favorable lower court ruling for Smurfit.The company said understands that Smurfit intends on asking the U.S. SupremeCourt to review this decision. Should Smurfit prevail, the company said itwould collect the refund.
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