Rizzo v. State of MI, Dept. of Treasury (In re Rizzo)

Summarized by Michael Coury , Glankler Brown, PLLC
12 years 4 weeks ago

Citation:

Rizzo v State of Michigan Dept. of Treasury (In re Rizzo), Case No. 13-1230

Tag(s):

Ruling:

Whether a state tax is a non-dischargeable "excise tax" is a matter of federal law. The Court found that the term "excise tax" in Sec. 507 was not ambiguous and that whether a tax is an "excise tax" or not does not depend on who is required to pay it. Sec. 507(a)(8)(E)'s reference to "excise tax" only denotes the nature of the assessment and not who is required to pay the assessed funds. Moreover, Michigan's responsible-corporate officer statute did not impose an obligation that was of a different nature from the liability imposed upon the company to pay the excise tax. Accordingly, the Debtor's derivative liability for unpaid excise tax incurred by a company for which Debtor was a responsible corporate officer is non-dischargeable as a debt for an excise tax under 11 U.S.C. 507(a)(8)(E).

Procedural context:

Appeal from order of the district court affirming decision of bankruptcy court which found tax debt to be non-dischargeable.

Facts:

Following the Debtor's Chapter 7 discharge, the Michigan Dept. of Treasury continued to assert that the Debtor was liable for more than $70,000 in unpaid Michigan Single Business Tax owed by a defunct company of which the Debtor had been an officer. The Debtor conceded that the SBT was an "excise tax" as to the company. The Debtor contended, however, that, because his liability was derivative, his personal obligation to pay was not a debt for an excise tax since it did not arise from his own participation in any taxable transaction. Accordingly, the Debtor contended his liability was dischargeable. The bankruptcy court held that the debt was non-dischargeable as an excise tax under 11 U.S.C. 507(a)(8)(E). The District Court affirmed. The Debtor appealed to the Sixth Circuit.

Judge(s):

Suhrheinrich, Griffin, and Kethledge

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