Sections 21, 32a
LIABILITY, Tax Rate, Temporary Rate, Rate determination, Computation date
CITE AS: MESC v NL Industries (USA) Inc., Oakland Circuit Court, No. 93-459745-AE (January 5, 1994).
Appeal pending: No
Employer: NL Industries (USA), Inc.
Docket No. L90-10851-2103
CIRCUIT COURT HOLDING: Where the MESC fails to issue rate determinations and, instead assigns temporary rates by means of quarterly contribution reports, for a period of years, those so-called temporary rates become final if the employer is not notified of a contribution rate within six months of the computation date (June 30).
FACTS: In 1985, MESC issued determination of successorship. No rate determination was issued, but employer's quarterly contribution reports showed rate of 2.7%. Sometimes a "T" appeared before the rate. Employer paid the 2.7% rate until October 27, 1989, at which time the MESC issued rate determinations covering 1985-89 of 9.1%, 8.7%, 7.8%, 7.3% and 6.6%. MESC's position was that the quarterly reports were not rate determinations and not subject to the finality provisions of Section 32a(2). Further, the statute and Administrative Rules do not provide for temporary rates and therefore, the rates shown on the quarterly contribution statements could not become final rates under Section 21(a).
DECISION: Decision of MES Board of Review affirmed. (Later MESC appeal to Court of Appeals withdrawn.)
RATIONALE: Under Section 21(a), employers are entitled to notification of contribution rate no later than six months after the computation date. This notification is mandatory, not discretionary. The computation date under Section 18(a) is June 30 of each year. Therefore, employers must be notified of rate by December 31 of each year. Otherwise the finality provisions of Section 32a(2) apply. A statement of a rate such as that on the quarterly contribution report is a "statement" of a rate determination pursuant to Section 21(a).
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