Loren Cook Co. v. Dir. of Revenue

At issue here was whether the sale of an aircraft and subsequent purchase of another from different entities can be considered a "trade-in" for purposes of the "taken in trade" tax exemption under Mo. Rev. Stat. 144.025 when an intermediary is used to facilitate the transaction. Here, Taxpayer purchased a 525B Cessna aircraft from Cessna Aicraft Company for $7.2 million. Taxpayer subsequently sold a 525A Cessna aircraft to C.B. Aviation for $4.7 million. Taxpayer used an intermediary in the sale. Taxpayer reported $2.5 million - the difference between the purchase price of the 525B aircraft and the sale price of the 525A aircraft - on its tax return. Taxpayer claimed it was entitled to a $4.7 million credit under section 144.025. The director of revenue determined Taxpayer was not entitled to the trade-in credit. The Supreme Court affirmed, holding (1) to receive a tax exemption under section 144.025, the taxpayer must demonstrate that its relinquished property was "taken in trade" for the acquired property; and (2) because the use of an intermediary did not transform the separate sale and purchase transactions into one trade-in transaction, Taxpayer could not claim a trade-in exemption. View "Loren Cook Co. v. Dir. of Revenue" on Justia Law