Bauer v. Department of Treasury

Plaintiffs are holders of royalty interests and lessors of mineral rights in oil and gas wells in the State of Michigan. In 1985, plaintiffs received royalty payments from the production of oil and gas. These royalties were reduced to reflect payment of the severance tax, pursuant to Brown v Shell Oil Co, 128 Mich App 111; 339 NW2d 709 (1983).

Plaintiffs submitted applications to defendant, the Department of Treasury, for refunds of that portion of their 1985 personal income taxes attributable to payments received on their royalty interests. In doing so, they relied on § 15 of the severance…