M. J. Kelly, P.J.
Petitioner, Port Huron & Detroit Railroad Company, appeals as of right a decision of the Michigan Tax Tribunal which found the petitioner liable for a single business tax deficiency of $17,073.51,*
1 under MCL 208.57(3); MSA 7.558(57)(3).2
Prior to the hearing below, the parties stipulated that at all times pertinent the petitioner was a corporation electing subchapter S status under the Federal Internal Revenue Code. 26 USC 1371 et seq. The parties also agreed that the petitioner corporation is the "taxpayer” from which the single business tax may be collected. MCL 208.10(2); MSA 7.558(10)(2).
As a transportation company, the petitioner’s state tax liability was to be calculated under the terms of MCL 208.57(3); MSA 7.558(57)(3) which provided:
"For any tax year ending on or before December 31, 1977, the tax base attributable to this state shall be [416]*41630% of the tax base otherwise computed under the provisions of subsection (1). In no event shall the tax so computed be less than an amount equal to the 5ryear average tax liability measured as a percentage of gross receipts, determined by computing the percentage that the taxpayer’s liability for the taxes levied under Act No. 85 of the Public Acts of 1921, as amended, being sections 450.304 to 450.310 of the Michigan Compiled Laws, Act No. 281 of the Public Acts of 1967, as amended, being sections 206.1 to 206.532 of the Michigan Compiled Laws, Act No. 301 of the Public Acts of 1939, as amended, being sections 205.131 to 205.147 of the Michigan Compiled Laws, and the tax levied on the inventory portion of personal property under Act No. 206 of the Public Acts of 1893, as amended, being sections 211.1 to 211.157 of the Michigan Compiled Laws, or Act No. 282 of the Public Acts of 1905, as amended, being sections 207.1 to 207.21 of the Michigan Compiled Laws, bears to the gross receipts of the taxpayer. The 5-year average tax liability under this subsection shall be computed and determined from the 1971 to 1975 tax years. This subsection shall expire December 13, 1977. ”3
Petitioner calculated and paid its 1976 single business tax based upon its position that the phrase contained in MCL 208.57(3); MSA 7.558(57)(3), "the taxpayer’s liability for [Michigan income tax]” referred to the petitioner’s Michigan income tax liability which for the period in question was zero.
The Michigan Department of Treasury, Revenue Division, conducted an audit of the petitioner for the 1976 tax year. As a result of this audit, the department determined that the petitioner should [417]*417have included in the calculations of its alternative tax under the second part of MCL 208.57(3); MSA 7.558(57X3) the Michigan income tax paid by petitioner’s shareholders which was attributable to the distributive income that the shareholders received from the petitioner corporation. Applying these amounts to the tax computation formula of § 57(3) would leave the petitioner with a tax liability of $14,056. To the propriety of the order of the Tax Tribunal directing payment of this amount and additional interest charges, the petitioner raises two issues.
We begin by noting the applicable standard of review for decisions of the Michigan Tax Tribunal. By statute, the Legislature has limited the scope of our review to the circumstances specified in Const 1963, art 6, § 28; MCL 205.753(1); MSA 7.650(53X10):
"In the absence of fraud, error of law or the adoption of wrong principles, no appeal may be taken to any court from any final agency provided for the administration of property tax laws from any decision relating to valuation or allocation.”
See also Michigan National Bank, Lansing v City of Lansing, 96 Mich App 551, 553; 293 NW2d 626 (1980).
The first issue raised by the petitioner concerns the department’s interpretation of the tax computation provision of § 57(3). Specifically, petitioner challenges the department’s holding that taxes paid by the petitioner’s shareholders pursuant to their election to be taxed under subchapter S should be counted toward "the taxpayer’s liability for the taxes levied under” the former Michigan Income Tax Act, MCL 206.1 et seq.; MSA 7.557(101) et seq., as a basis for determining the [418]*418petitioner’s single business tax liability. Because of its subchapter S status, the petitioner corporation had no income tax liability for the prior five-year period upon which the single business tax was to be determined. Thus, argues petitioner, since the corporation’s average income tax liability was zero,4 its single business tax liability should also be nothing. The department contends that the statutory phrase "the taxpayer’s liability”, as applied to Michigan income taxes paid from 1971 through 1975, includes those income taxes paid by the petitioner’s shareholders upon distributive income generated by the petitioner’s business activities. If such tax payments are included in the § 57(3) formula, the petitioner’s single business tax liability is $14,056, exclusive of interest. From the above dispute, we must determine whether "the taxpayer’s liability” is that of the corporation or its subchapter S shareholders.
The fundamental rule of statutory construction is that we must ascertain and give effect to the Legislature’s intent. City of Lansing v Lansing Twp, 356 Mich 641; 97 NW2d 804 (1959), Arbor Sales, Inc v Dep’t of Treasury, 104 Mich App 181; 304 NW2d 522 (1981). See also Production Credit Ass’n of Lansing v Dep’t of Treasury, 404 Mich 301, 312; 273 NW2d 10 (1978), in which the Supreme Court found the presence of undefined terms of art in the former Income Tax Act "indicative of a legislative intent that the act be inter[419]*419preted in accordance with the experience and understanding of those who would be expected to use and interpret the act”.
With respect to the Single Business Tax Act, the Legislature provided several definitional sections applicable to this case. Initially, under MCL 208.2; MSA 7.558(2), the act denotes the scope of terms specially defined in §§ 208.3 to 208.10 of the act, MCL 208.3-208.10; MSA 7.558(3)-7.558(10), and a reference for terms not specifically defined:
"(1) For the purposes of this act, the words and phrases defined in sections 3 to 10 shall have the meanings respectively ascribed to them in those sections.
"(2) A term used in this act and not defined differently shall have the same meaning as when used in comparable context in the laws of the United States relating to federal income taxes in effect for the tax year unless a different meaning is clearly required. A reference in this act to the internal revenue code includes other provisions of the laws of the United States relating to federal income taxes.”
Thereafter, in MCL 208.10(2); MSA 7.558(10X2), the definition of "taxpayer” is provided:
" 'Taxpayer’ means a person liable for a tax, interest or penalty under this act”.
The "tax” referred to in this definition is that levied under MCL 208.31(1); MSA 7.558(31)(1) and is generally equal to 2.35% "upon the adjusted tax base of every person with business activity in this state which is allocated or apportioned to this state”.
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M. J. Kelly, P.J.
Petitioner, Port Huron & Detroit Railroad Company, appeals as of right a decision of the Michigan Tax Tribunal which found the petitioner liable for a single business tax deficiency of $17,073.51,*
1 under MCL 208.57(3); MSA 7.558(57)(3).2
Prior to the hearing below, the parties stipulated that at all times pertinent the petitioner was a corporation electing subchapter S status under the Federal Internal Revenue Code. 26 USC 1371 et seq. The parties also agreed that the petitioner corporation is the "taxpayer” from which the single business tax may be collected. MCL 208.10(2); MSA 7.558(10)(2).
As a transportation company, the petitioner’s state tax liability was to be calculated under the terms of MCL 208.57(3); MSA 7.558(57)(3) which provided:
"For any tax year ending on or before December 31, 1977, the tax base attributable to this state shall be [416]*41630% of the tax base otherwise computed under the provisions of subsection (1). In no event shall the tax so computed be less than an amount equal to the 5ryear average tax liability measured as a percentage of gross receipts, determined by computing the percentage that the taxpayer’s liability for the taxes levied under Act No. 85 of the Public Acts of 1921, as amended, being sections 450.304 to 450.310 of the Michigan Compiled Laws, Act No. 281 of the Public Acts of 1967, as amended, being sections 206.1 to 206.532 of the Michigan Compiled Laws, Act No. 301 of the Public Acts of 1939, as amended, being sections 205.131 to 205.147 of the Michigan Compiled Laws, and the tax levied on the inventory portion of personal property under Act No. 206 of the Public Acts of 1893, as amended, being sections 211.1 to 211.157 of the Michigan Compiled Laws, or Act No. 282 of the Public Acts of 1905, as amended, being sections 207.1 to 207.21 of the Michigan Compiled Laws, bears to the gross receipts of the taxpayer. The 5-year average tax liability under this subsection shall be computed and determined from the 1971 to 1975 tax years. This subsection shall expire December 13, 1977. ”3
Petitioner calculated and paid its 1976 single business tax based upon its position that the phrase contained in MCL 208.57(3); MSA 7.558(57)(3), "the taxpayer’s liability for [Michigan income tax]” referred to the petitioner’s Michigan income tax liability which for the period in question was zero.
The Michigan Department of Treasury, Revenue Division, conducted an audit of the petitioner for the 1976 tax year. As a result of this audit, the department determined that the petitioner should [417]*417have included in the calculations of its alternative tax under the second part of MCL 208.57(3); MSA 7.558(57X3) the Michigan income tax paid by petitioner’s shareholders which was attributable to the distributive income that the shareholders received from the petitioner corporation. Applying these amounts to the tax computation formula of § 57(3) would leave the petitioner with a tax liability of $14,056. To the propriety of the order of the Tax Tribunal directing payment of this amount and additional interest charges, the petitioner raises two issues.
We begin by noting the applicable standard of review for decisions of the Michigan Tax Tribunal. By statute, the Legislature has limited the scope of our review to the circumstances specified in Const 1963, art 6, § 28; MCL 205.753(1); MSA 7.650(53X10):
"In the absence of fraud, error of law or the adoption of wrong principles, no appeal may be taken to any court from any final agency provided for the administration of property tax laws from any decision relating to valuation or allocation.”
See also Michigan National Bank, Lansing v City of Lansing, 96 Mich App 551, 553; 293 NW2d 626 (1980).
The first issue raised by the petitioner concerns the department’s interpretation of the tax computation provision of § 57(3). Specifically, petitioner challenges the department’s holding that taxes paid by the petitioner’s shareholders pursuant to their election to be taxed under subchapter S should be counted toward "the taxpayer’s liability for the taxes levied under” the former Michigan Income Tax Act, MCL 206.1 et seq.; MSA 7.557(101) et seq., as a basis for determining the [418]*418petitioner’s single business tax liability. Because of its subchapter S status, the petitioner corporation had no income tax liability for the prior five-year period upon which the single business tax was to be determined. Thus, argues petitioner, since the corporation’s average income tax liability was zero,4 its single business tax liability should also be nothing. The department contends that the statutory phrase "the taxpayer’s liability”, as applied to Michigan income taxes paid from 1971 through 1975, includes those income taxes paid by the petitioner’s shareholders upon distributive income generated by the petitioner’s business activities. If such tax payments are included in the § 57(3) formula, the petitioner’s single business tax liability is $14,056, exclusive of interest. From the above dispute, we must determine whether "the taxpayer’s liability” is that of the corporation or its subchapter S shareholders.
The fundamental rule of statutory construction is that we must ascertain and give effect to the Legislature’s intent. City of Lansing v Lansing Twp, 356 Mich 641; 97 NW2d 804 (1959), Arbor Sales, Inc v Dep’t of Treasury, 104 Mich App 181; 304 NW2d 522 (1981). See also Production Credit Ass’n of Lansing v Dep’t of Treasury, 404 Mich 301, 312; 273 NW2d 10 (1978), in which the Supreme Court found the presence of undefined terms of art in the former Income Tax Act "indicative of a legislative intent that the act be inter[419]*419preted in accordance with the experience and understanding of those who would be expected to use and interpret the act”.
With respect to the Single Business Tax Act, the Legislature provided several definitional sections applicable to this case. Initially, under MCL 208.2; MSA 7.558(2), the act denotes the scope of terms specially defined in §§ 208.3 to 208.10 of the act, MCL 208.3-208.10; MSA 7.558(3)-7.558(10), and a reference for terms not specifically defined:
"(1) For the purposes of this act, the words and phrases defined in sections 3 to 10 shall have the meanings respectively ascribed to them in those sections.
"(2) A term used in this act and not defined differently shall have the same meaning as when used in comparable context in the laws of the United States relating to federal income taxes in effect for the tax year unless a different meaning is clearly required. A reference in this act to the internal revenue code includes other provisions of the laws of the United States relating to federal income taxes.”
Thereafter, in MCL 208.10(2); MSA 7.558(10X2), the definition of "taxpayer” is provided:
" 'Taxpayer’ means a person liable for a tax, interest or penalty under this act”.
The "tax” referred to in this definition is that levied under MCL 208.31(1); MSA 7.558(31)(1) and is generally equal to 2.35% "upon the adjusted tax base of every person with business activity in this state which is allocated or apportioned to this state”. Finally, "business activity” is defined in MCL 208.3(2); MSA 7.558(3X2):
" 'Business activity’ means a transfer of legal or [420]*420equitable title to or rental of property, whether real, personal, or mixed, tangible or intangible, or the performance of services, or a combination thereof, made or engaged in, or caused to be made or engaged in, within this state, whether in intrastate, interstate, or foreign commerce, with the object of gain, benefit, or advantage, whether direct or indirect, to the taxpayer or to others, but shall not include the services rendered by an employee to his employer, services as a director of a corporation, or a casual transaction. Although an activity of a taxpayer may be incidental to another or other of his business activities, each activity shall be considered to be business engaged in within the meaning of this act.”
Although the petitioner’s shareholders fit within the definition of "person” provided in MCL 208.6(1); MSA 7.558(6)(1),5 it is apparent that they are not "person[s] liable for a tax” under the act, since the single business tax may be levied only against "persons with business activity in this state”. As we interpret the permissible scope of business activity as defined above, the activities of petitioner’s shareholders are not included.
We also note the reference to subchapter S corporations contained in the former Income Tax Act, MCL 206.81(2); MSA 7.557(181X2), as bearing on the single business tax liability of the petitioner:
"A corporation which has filed a proper election under subchapter S of the internal revenue code shall not be subject to the tax imposed by this act with respect to the taxable years for which such election is in effect. Each participant shall include his proportion[421]*421ate share of the taxable income whether or not distributed and whether or not distributable.”
As written, a corporation electing subchapter S status was simply not liable for the corporate income tax formerly imposed under MCL 206.61; MSA 7.557(161).6 Where the definition of taxpayer in the present act includes only the petitioner corporation and such corporation incurred no state income tax liability by electing under subchapter S, the Tax Tribunal erred by including the shareholder’s tax liability in the computation of petitioner’s single business tax assessment.
The petitioner also alleges that if § 57(3) of the Single Business Tax Act is interpreted to include shareholder tax liability, the act would deny to the petitioner its right to equal protection of the laws. US Const, Am XIV; Const 1963, art 1, § 2. We decline, however, to consider the petitioner’s constitutional challenge.* ****7 It is well settled that appellate courts of this state will not review constitutional questions in cases fairly disposed of on alternative grounds. Lisee v Secretary of State, 388 Mich 32, 40-41; 199 NW2d 188 (1972), In re Winkle, 372 Mich 292; 125 NW2d 875 (1964), app dismissed 379 US 645; 85 S Ct 611; 13 L Ed 2d 551 (1965).
The opinion and order of the Michigan Tax Tribunal affirming the assessment of $17,073.51 in deficient taxes and interest is reversed and the [422]*422case remanded for entry of an order dismissing said assessment against the petitioner.
Reversed and remanded.
C. L. Horn, J., concurred.