Tag: alcohol

Five Stories that Matter in Michigan This Week – July 8, 2022

  1. Michigan Adopts Version of the Uniform Assignment of Rents Act

Michigan recently adopted its version of the Uniform Assignment of Rents Act (the “UARA”), which establishes a comprehensive statutory model for the creation, perfection, and enforcement of security interests in rent. It is the sixth state to adopt the UARA.

Why it Matters: An assignment of rents allows a lender to collect income from rents derived from mortgaged property after the mortgage has been defaulted on. It protects a lender against scenarios in which a borrower (typically a commercial landlord)  is continuing to collect rent from a property but is no longer making mortgage payments. The Michigan UARA codifies rules related to assignments of rents, bringing clarity to both lenders and borrowers.

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  1. Michigan’s November 2022 Ballot to Include Fair Lending Proposal Capping Payday Loan Interest Rates

Supporters of the Payday Loan Interest Rate Cap ballot initiative in Michigan secured sufficient signatures to put the initiative  on the November 2022 ballot.

Why it Matters: Once the petition is validated by Michigan’s Board of State Canvassers, the Michigan legislature will have 40 days to approve the initiative, as submitted.  If the legislature rejects the initiative or fails to act by the deadline, the proposal will be placed on the November 2022 ballot for voters to decide. If passed, payday loan rates will be capped at 36% APR or less.

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  1. Michigan Property Taxes are Set to Jump

Gas, groceries, and now summer property tax bills are spiking in Michigan. The inflation rate adjustment for this year’s property taxes in Michigan is 3.3%.

Why it Matters: Under Proposal A, there is  a maximum 5% inflation rate adjustment allowed. While this year’s increase is less than the cap, it is the highest it has been since 2007. And many expect next year’s increase to hit the 5% cap. In a Detroit Free Press article, Patrick Anderson, CEO of the Anderson Economic Group said: “Basically, we’re baked in at 5% next year.”

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  1. Michigan Leads the Nation in Energy-Sector Job Growth

According to an annual report recently issued by the U.S. Department of Energy, Michigan added 35,463 energy-sector jobs from 2020—more than any other state in 2021, boosted primarily by the automotive industry and its increased focus on hybrid and electric vehicle models.

Why it Matters: With soaring inflation and increased expectations of an economic recession, Michigan’s strength in energy-sector jobs bodes well for Michigan workers and businesses. The energy sector in Michigan represents 9.5 percent of state employment, with 393,207 jobs total.

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  1. Michigan Bill Would Cut Taxes for Small Distillers, Provide Boost to Local Farmers

The Michigan legislature recently approved legislation that would cut the state Liquor Control Commission markup on small distillery alcohol from 65% to 32.5% if more than 40% of the grains and other crops used to distill the liquor are grown in Michigan.

Why it Matters: If signed into law by Governor Whitmer, this tax cut would result in large savings for small Michigan distillers and help them compete with larger national producers. Because the tax savings are tied to the purchase of grains and other crops grown in Michigan, local farmers would also benefit.

Related Practice Groups and Professionals

Business & Tax| Ed Castellani

Real Estate | Jared Roberts

Election Law | Garett Koger

Energy, Utilities & Telecommunication | Michael Ashton

Governor Whitmer Allows Michigan Liquor Control Commission to Buy Back Liquor from Certain Liquor License Holders

In Executive Order 2020-46 issued April 13, 2020, Governor Whitmer authorized the Michigan Liquor Control Commission (“Commission”) to offer a licensee a cash buyback of any spirits a licensee ordered from the Commission and received and accepted from an Authorized Distribution Agent before March 16, 2020. When a licensee opts into this buyback program, the Commission must advance to the licensee 100% of the purchase price of those spirits that are in the licensee’s inventory.

The Commission may accept buyback requests, by email or on its website, only from licensees that hold one of the following license types: Class C, B-Hotel, G-1, Club, Continuing Care Retirement Center, Aircraft, Watercraft, and Train License. The Commission must begin accepting requests on its website as soon as reasonably possible, and must accept all requests made by 5:00 pm on April 17, 2020.

Upon advancing cash to a licensee pursuant to the buyback program, the Commission will hold legal title to all spirits purchased by the licensee before March 16, 2020 that are in the licensee’s inventory at the time the licensee opts into the buyback program. But, in recognition of the risks of COVID-19 infection and transmission associated with in-person contact, the Commission must not take physical possession of any such spirits except as provided in the Order or any Order that may follow from it. The licensee must take all reasonable care to account for and preserve the inventory of any such spirits.

A licensee that opts into this buyback program may, at any time until the Commission takes physical possession of spirits it owns, repay to the Commission the full amount advanced to the licensee. Upon repayment of the full buyback amount, the licensee will again hold title to the spirits in its possession.

The Commission may take physical possession of any spirits held by any licensee to which the Commission holds legal title at any time later than 90 days after the end of the declared states of emergency and disaster.

The Order is effective immediately, and can be viewed here.

We have created a response team to the rapidly changing COVID-19 situation and the law and guidance that follows, so we will continue to post any new developments. You can view our COVID-19 Response Page and additional resources by following the link here. In the meantime, if you have any questions, please contact your Fraser Trebilcock attorney.

Fraser Trebilcock Business Tax Attorney Edward J. CastellaniEdward J. Castellani is an attorney and CPA who represents clients involved with alcohol beverages as a manufacturer, wholesaler, or retailer. He may be contacted at ecast@fraserlawfirm.com or 517-377-0845.