Justia Tax Law Opinion Summaries

Articles Posted in Supreme Court of Missouri
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The Missouri Supreme Court ruled in a case involving the St. Louis County Assessor ("Assessor") and a group of St. Louis County commercial property owners, referred to as "Taxpayers." The Taxpayers alleged that their properties were assessed at a higher percentage of fair market value (FMV) than other commercial properties in the county. This claim is known as a "ratio discrimination" claim. The Taxpayers appealed their assessments to the local board of equalization ("BOE") and the Missouri State Tax Commission ("STC"). In some of the appeals, the BOE and STC did not change the Assessor's original FMV and assessed value, while in others, they ordered reductions in the estimated FMV of the property, resulting in a lower assessed value and decreased tax liability.The STC found that the Taxpayers did not provide substantial and persuasive evidence of discrimination. The Taxpayers then filed a petition for judicial review, and the circuit court reversed the STC's decision and order and remanded the case for retrial. The Assessor appealed to the Missouri Supreme Court, which found that the STC's decision was authorized by law and supported by substantial evidence. The Court agreed with the STC that the Taxpayers did not provide persuasive evidence of discriminatory assessment. The Court held that the actual assessment level used to analyze a claim of discriminatory assessment and taxation is based on the assessed value that actually determines the tax liability. The Court also found that the STC did not abuse its discretion by denying certain discovery requests and quashing subpoenas for the deposition of the Assessor and several staff appraisers. The circuit court's judgment was vacated, and the STC's decision and order was reinstated. View "Crown Diversified Industries Corp. v. Zimmerman" on Justia Law

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The Supreme Court affirmed the decision of the Administrative Hearing Commission determining that Walmart Starco LLC was exempt from use tax for its purchase and use of information technology equipment pursuant to Mo. Rev. Stat. 144.018.1 and 144.615(6), holding that the Commission correctly concluded that the equipment was exempt from use tax.The Commission ultimately determined that Starco's use of the information technology equipment at issue was exempt from use tax under sections 144.018.1 and 144.615(6). The Supreme Court affirmed, holding (1) Starco showed that it held the equipment solely for resale pursuant to section 144.615(6); and (2) the second argument raised on appeal was unpreserved for appellate review. View "Walmart Starco LLC v. Director of Revenue" on Justia Law

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The Supreme Court affirmed the decision of the administrative hearing commission (AHC) finding that Charter Communications Entertainment I, LLC (CCE I) was entitled to manufacturing exemptions with respect to its 2011 and 2012 purchases of replacement equipment used to provide telecommunications service, holding that the AHC's decision was authorized by law.Specifically, the Supreme Court held that the AHC did not err in (1) finding CCE I's provision of telecommunications service qualified as "manufacturing" for purposes of the sales and use tax exemptions in Mo. Rev. Stat. 144.030.2(4) and 144.054.2; and (2) finding that CCE I was not required to establish that its replacement equipment was "substantially used" in manufacturing in addition to proving that the equipment satisfied the integrated plant doctrine and was "used directly" in manufacturing. View "Charter Communications Entertainment I, LLC v. Director of Revenue" on Justia Law

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The Supreme Court affirmed the decision of the Administrative Hearing Commission that Saddle and Sirloin Club of Kansas City was not entitled to a refund of sales tax on monthly membership dues paid by Club members because the dues were fees paid to a place of amusement, entertainment, or recreation pursuant to Mo. Rev. Stat. 144.021.1, holding that the Club was not owed a refund.On appeal, the Club argued that the monthly membership dues were not subject to sales tax because, in addition to recreation services, Club members received the right to participate in the operation and control of the Club and an increase in the value of their equitable interests in the Club. The Supreme Court disagreed and affirmed, holding (1) the Club failed to meet its burden of proving that members receive more than recreational services in exchange for monthly membership dues; and (2) therefore, the monthly membership dues were subject to sales tax pursuant to Mo. Rev. Stat. 144.020.1(2). View "Saddle & Sirloin Club of Kansas City v. Director of Revenue" on Justia Law

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The Supreme Court affirmed the decision of the administrative hearing commission (AHC) denying the complaint brought by Plaintiff, as personal representative of the estate of James Townsend, that the director of the department of revenue was not authorized to assess unpaid sales tax owed by Green Duck Lounge, Inc. against Townsend as a responsible party under Mo. Rev. Stat. 144.157.3, holding that the AHC's decision was authorized by law.On appeal, Plaintiff argued, among other things, that a prior judgment denying the department's attempt to collect the company's unpaid sales tax from Townsend's estate was res judicata, barring the director's assessment of the unpaid sales tax against Townsend personally. The Supreme Court affirmed, holding (1) the AHC did not err in finding that res judicata did not bar the director's assessment against Townsend, personally, as a responsible party; and (2) neither Mo. Rev. Stat. 144.220.3 nor section 144.157.3 required the director to mail notice of his intent to make an assessment against Townsend, as a responsible party, within years after the company's returns were filed. View "LaBlanche v. Director of Revenue" on Justia Law

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The Supreme Court affirmed the decision of the administrative hearing commission (AHC) finding beyond Housing, Inc. and Pagedale Town Center II, LLC (PTC II) qualify for sales and use tax exemptions as charitable organizations pursuant to Mo. Rev. Stat. 144.030.2(19), holding that the AHC's decision was proper.On appeal, the director of the department of revenue argued, among other things, that the HAC erred in determining that Beyond Housing and PTC II could qualify as a charitable organization because Beyond Housing was previously granted civic exemptions and, the director claimed, the statutory categories of charitable and civic exemptions are mutually exclusive classifications. The Supreme Court affirmed, holding (1) the AHC did not err in finding Beyond Housing and PTC II qualified for the charitable exemption; and (2) the AHC’s determination that Beyond Housing and PTC II qualified for sales and use tax exemptions as charities was supported by competent and substantial evidence and comported with the law. View "Beyond Housing, Inc. v. Director of Revenue" on Justia Law

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The Supreme Court vacated the decision of the Administrative Hearing Commission (AHC) that the purchases by Carfax, Inc. of certain equipment used to create vehicle history reports (VHRs) were exempt from sales and use taxes under Mo. Rev. Stat. 144.030.2(5) and 144.054.2 because Carfax used such equipment to "manufacture" VHRs, holding that Carfax did not use the equipment in the "manufacturing" of its VHRs.After an audit, the Director of Revenue determined that Carfax did not use the disputed equipment to manufacture VHRs, and therefore, its purchase of that equipment was not exempt from sales and use taxes. On appeal, the AHC found that Carfax's purchases of the equipment were exempt from sales and use taxes under both sections 144.303.2(5) and 144.054(2) because Carfax used that equipment directly in manufacturing VHRs. The Supreme Court vacated the decision below, holding that, for purposes of these statutes, Carfax did not use the disputed equipment to manufacture VHRs. View "Carfax, Inc. v. Director of Revenue" on Justia Law

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The Supreme Court vacated the judgment of the circuit court that the solar energy system owned by Springfield Solar 1, LLC was tax-exempt as a "solar energy system not held for resale" pursuant to Mo. Rev. Stat. 137.100(10), holding that the statute is unconstitutional because the Missouri Constitution does not grant the legislature the power to exempt solar energy systems not help for resale from taxation.Springfield Solar appealed the Assessor for Greene County's 2017 assessment of its solar energy system (the equipment), arguing that the equipment was tax-exempt under section 137.100(10), which states that solar energy systems not help for resale are exempt from taxation for state, county, and local purposes. The Commission concluded that the equipment was exempt from taxation under section 137.100(10). The Assessor filed a petition for judicial review, arguing that the Commission's decision was unlawful. The circuit court entered judgment in favor of Springfield Solar, finding that the statute was constitutional. The Supreme Court reversed, holding that the tax exemption created by section 137.100(10) is unconstitutional. View "Johnson v. Icet" on Justia Law

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The Supreme Court affirmed the decision of the circuit court granting judgment on the pleadings in favor of the Affton Fire Protection District, the governor, and the attorney general (collectively, Defendants) in this challenge to Mo. Rev. Stat. 72.418.2 and 321.322.3, holding that the circuit court did not err.The City of Crestwood and two of its resident taxpayers (collectively, Plaintiffs) argued that sections 72.418.2 and 321.322.3, which govern the provision of and payment for fire protection services in certain annexed areas, violate the prohibition against special laws in Mo. Const. art. III, 40 and that section 72.418.2 violates constitutional due process protections and provisions of the Missouri Constitution prohibiting certain taxes and the creation of unfunded mandates. The Supreme Court held (1) a rational basis supported the classification scheme in sections 72.418 and 321.322.3; (2) the fee Crestood pays to the district is not a tax on the resident taxpayers of Crestwood; and (3) section 72.418.2 does not create an unfunded mandate. View "City of Crestwood v. Affton Fire Protection District" on Justia Law

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The Supreme Court affirmed in part and reversed in part the decision of the administrative hearing commission (AHC) finding no use tax liability for APLUX LLC and Paul and Ann Lux Associates L.P. on the out-of-state purchase of two aircraft, holding that APLUX was not entitled to resale exemption on the purchase of either aircraft.After purchase, both aircraft - referred to as "the TBM" and "the Excel" - were brought to Missouri. APLUX asserted that it leased, on a non-exclusive basis, the TBM to its parent company, Luxco, Inc., and the Excel concurrently to both Luxco and Aero Charter, Inc. The AHC held that each lease agreement constituted a "sale" for purposes of the tax resale exemption set out in Mo. Rev. Stat. 144.018. The Supreme Court reversed in part, holding that a "sale" to Luxco did not occur, and therefore, APLUX was not entitled to a resale exemption based on the Luxco agreement. View "APLUX, LLC v. Director of Revenue" on Justia Law