Justia Tax Law Opinion Summaries

The Supreme Court reversed the decision of the Administrative Hearing Commission (AHC) that certain equipment purchased by Dreyer Electric Co. was exempt from sales tax because it was "replacement equipment" "used directly in the manufacturing process," as those terms are used in Mo. Rev. Stat. 144.030.2(5), holding that the AHC erred.Specifically, the Supreme Court held (1) the AHC correctly applied the three-factor "integrated plant doctrine" test set out in Floyd Charcoal Co. v. Director of Revenue, 599 S.W.2d 173 (Mo. banc 1980), to determine whether the subject replacement parts and equipment were "used directly in manufacturing"; but (2) the AHC erred in making specific findings as to some parts and then grouping all the parts together, including those it had not mentioned specifically in its decision, to find they were collectively integral to the electrical system that powered the machinery. The Court remanded the case for application of the integrated plant test to each type of replacement part or equipment purchased. View "Dreyer Electric Co., LLC v. Director of Revenue" on Justia Law

The Supreme Court reversed the decision of the Administrative Hearing Commission (AHC) holding that The Kansas City Chiefs Football Club, Inc. (the team) was the "purchaser" of certain items used in the renovation of Arrowhead Stadium and its related facilities and was, therefore, liable for sales and use tax on those items, holding that the AHC erred in determining that the team was the purchaser of the items.After the renovation was complete, the Director of Revenue conducted a sales and use tax audit and determined that the team was liable for sales and use tax on seven categories of contested items purchased from the nine vendors at issue in this appeal. The team appealed to the AHC, which found the team liable for sales tax and use tax on the items. The Supreme Court reversed, holding that the team was not the source of the consideration for the contested items and, therefore, was not the purchaser of the items, as that term is used in Missouri's sales and use tax statutes. View "Kansas City Chiefs Football Club, Inc. v. Director of Revenue" on Justia Law

The Supreme Court affirmed the decision of the Administrative Hearing Commission determining that DI Supply I, LLC's room furnishing sales to the Drury Hotels were not exempt from sales tax under the resale exemption in Mo. Rev. Stat. 144.010.1(11), holding that DI Supply failed to meet its burden to prove that the items it sold to Drury Hotels were resold by the hotels.An audit determined that DI Supply failed to remit sales tax on more than $11 million in taxable sales of room furnishings to Drury Hotels during the audit period. DI Supply contested the tax liability, arguing that the items of tangible personal property were purchased for resale to hotel guests and not subject to Missouri local sales or use tax. The Commission upheld $613,159 of the assessment for sales tax and interest. On appeal, DI Supply contested its sales tax liability for sales of room furnishings to Drury Hotels. The Supreme Court affirmed, holding that DI Supply failed to show that Drury Hotels transferred title or ownership of the room furnishings and, therefore, failed to show the applicability of the resale exemption by clear and unequivocal proof. View "DI Supply I, LLC v. Director of Revenue" on Justia Law

The Supreme Court affirmed in part and reversed in part the judgment of the trial court entering judgment in favor of the cities of Aurora, Cameron, Oak Grove, and Wentzville (collectively, the Cities) in this action for declaratory judgment and injunctive relief against CenturyLink, Inc. and its subsidiaries, holding that the trial court erred in awarding prejudgment interest and attorneys fees to the Cities.In their petition, the Cities alleged that, since 2000, CenturyLink failed to pay all license taxes owed under the Cities' respective ordinances. Further, the Cities alleged that CenturyLink failed to enter into right-of-way user agreements under Cameron's and Wenzville's respective ordinances and failed to pay Cameron's linear foot fees. The trial court entered partial summary judgments in favor of the Cities on the issue of liability. After a trial, the court entered a final judgment for the Cities on the issue of damages. The trial court then awarded the Cities attorney fees, prejudgment interest, and postjudgment interest. The Supreme Court reversed in part and remanded the cause, holding that the trial court (1) erred in awarding prejudgment interest to the Cities, and (2) erred in awarding attorney fees to three of the cities. View "City of Aurora, Missouri v. Spectra Communications Group, LLC" on Justia Law

The Supreme Court affirmed the decision of the administrative hearing commission determining that certain pain treatment service items used in compounding medications do not fall under the use tax exemption in Mo. Rev. Stat. 144.054.2 for materials used or consumed in compounding a product, holding that the commission correctly determined that the Interventional Center for Pain Management (Center) did not qualify for the compounding exemption under section 144.054.2.The director of revenue assessed $69,311 in tax liability for a five-year period against Center after discovering that Center did not file a use tax return or pay use tax on certain out-of-state purchases. Center contested use tax liability for certain items used for the injection of prescription drug compounds, asserting that the devices were exempt from use tax as materials used in compounding operation under section 144.054.2. The administrative hearing petition upheld the assessment. The Supreme Court affirmed, holding that Center failed to meet its burden of proof to prove its purchases were used in the compounding of a product for sale, as required for the compounding exemption under section 144.054.2. View "Interventional Center for Pain Management v. Director of Revenue" on Justia Law

The Supreme Court reversed the decision of the Administrative Hearing Commission (AHC) assessing use tax, additions to tax, and interest against Appellants, Business Aviation LLC and its members, as a result of Business Aviation's purchase of an aircraft, holding that Appellants qualified for the resale use tax exemption pursuant to the interplay of Mo. Rev. Stat. 144.018.1(4), 144.615(3), and 144.030.2(20).The aircraft at issue was purchased in Kansas and then leased by Business Aviation to Burgess Aircraft Management LLC, a common carrier in Missouri. The AHC determined that Appellants owed the use tax because, although it found that the right to use the aircraft was transferred to Burgess, the right was not fully transferred for valuable consideration. The Supreme Court reversed, holding that because Business Aviation transferred the right to use the aircraft to a common carrier for valuable consideration paid or to be paid, the lease agreement constituted a sale pursuant to both the use and sales tax definitions. View "Business Aviation, LLC v. Director of Revenue" on Justia Law

The Supreme Court reversed the decision of the administrative hearing commission (AHC) reversing the denial of the director of the department of revenue of David and Jill Kehlenbrinks' application for a sales tax refund, holding that the AHC erroneously decided that the Kehlenbrinks were entitled to a refund of all the sales tax they paid after their purchase of a new vehicle.On appeal, the director claimed that, in calculating the sales tax owed on the Kehlenbrinks' newly purchased vehicle, Mo. Rev. Stat. 144.025.1 allowed the Kehlenbrinks to credit the sale proceeds of only one vehicle against the purchase price of the new vehicle. The Supreme Court agreed, holding that the AHC erroneously decided that the Kehlenbrinks were entitled to a refund of all the sales tax they paid because it mistakenly allowed credit for four vehicles the Kehlenbrinks sold within 180 days of their purchase of a new vehicle. View "Kehlenbrink v. Director of Revenue" on Justia Law

The Supreme Court affirmed the decision of the administrative hearing commission finding Myron Green Corporation liable for sales tax on food sold to employees of the Federal Reserve Bank of Kansas City in the bank’s on-site cafeteria, holding that the cafeteria regularly served food to the public within the context of Mo. Rev. Stat. 144.020.1(6) and that the bank’s sales tax exemption did not extend to its individual employees.The primary issue on appeal was whether a third-party operator of a company cafeteria is liable for sales tax on food purchased by employees of a tax-exempt organization in that cafeteria when the organization sets the cafeteria’s hours, influences pricing, and subsidizes the cost of food in the cafeteria. The Supreme Court affirmed the judgment below, holding that there was substantial and competent evidence supporting the commission’s finding that (1) Myron Green’s sales in the bank’s cafeteria were taxable because the cafeteria regularly served meals and drinks to the public, and (2) Myron Green sold food to individual customers instead of to the bank. View "Myron Green Corp. v. Director of Revenue" on Justia Law

The Supreme Court affirmed the decision of the Administrative Hearing Commission finding Appellant’s claim for refund of sales tax untimely under Mo. Rev. Stat. 144.190.2, holding that the refund claim was untimely because it was filed more than three years after the tax return was due and more than three years after the date Appellant paid the tax.On appeal, Appellant conceded that it filed its refund request more than three years after remitting the sales tax. Appellant, however, asserted that the request was timely because 12 C.S.R. 10-102.016(2)(A) provides that a refund claim should also be considered timely if filed within three years of the date the tax return was due and that Appellant filed the refund request within three years of the latter date. The Supreme Court affirmed without reaching the issue of whether 12 C.S.R. 10-102.016(2)(A) is valid and consistent with section 144.190.2, holding that, even if 12 C.S.R. 10-102.016(2)(A) is applicable, Appellant was incorrect about when its return was due, and therefore, Appellant’s refund request was untimely. View "Crescent Plumbing Supply Company v. Director of Revenue" on Justia Law

The Supreme Court affirmed an Administrative Hearing Commission (Commission) decision allowing the director of revenue to redistribute tax revenue owed to the City of Lee’s Summit but erroneously paid to Cass County.Cass County sought a writ prohibiting the director of revenue from withholding the tax revenue and redistributing it to Lee’s Summit, arguing that the director lacked the authority to undertake such an action because this was a refund matter and no application for a refund was filed. The court of appeals ruled that a writ was inappropriate because the County had an adequate remedy by appeal to the Commission. On appeal to commission, the County was denied relief. The Supreme Court affirmed, holding that this was not a refund matter contemplated by Mo. Rev. Stat. 144.190.2, and accordingly, the County failed to demonstrate that the Commission's decision was not authorized by law. View "Cass County, Missouri, v. Director of Revenue" on Justia Law