Justia Missouri Supreme Court Opinion Summaries

Articles Posted in Tax Law
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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

Posted in: Tax Law
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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

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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

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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

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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

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The Administrative Hearing Commission erred in finding that the St. Louis Rams did not have to pay sales tax on the entertainment license tax (ELT) they included and collected from ticket purchasers as the amount paid for admission during certain periods from 2007 through 2013. The Commission (1) ordered the director of revenue to issue a refund to the Rams for the ELT included in the period from February 2007 through January 2010; and (2) found the Rams were not liable for sales tax based on the ELT collected and remitted from February 2010 through January 2013. The Supreme Court reversed the Commission’s decision and remanded the cause for further proceedings, holding that the Commission erred in finding the portion of the ticket sales the Rams used to pay the ELT was not subject to sales tax because the ELT was included in the amount ticket purchasers paid for admission via the fixed ticket price charged by the Rams. View "St. Louis Rams LLC v. Director of Revenue" on Justia Law

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Appellants, who owned residential property located entirely in St. Louis County, argued that Jefferson and Franklin counties systematically undervalued property in those counties, causing Appellants to bear a disproportionate share of the cost of operating multi-county taxing districts. After exhausting their administrative remedies, Appellants filed a petition in the circuit court challenging their 2011-12 property tax assessments. The circuit court dismissed the petition for failing to state a claim upon which relief can be granted. The Supreme Court affirmed the dismissal of Appellants’ administrative claims for review and their claim for declaratory relief, holding (1) Appellants failed to assert a violation of the uniformity clause in article X, section 3 of the Missouri Constitution; and (2) the State Tax Commission lacked jurisdiction to hear Appellants’ claims of inter-county discrimination on appeal from the St. Louis County Board of Equalization. View "Armstrong-Trotwood, LLC v. State Tax Commission of Missouri" on Justia Law

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In 2013, TracFone Wireless, Inc. sought refunds of the difference between the sales tax it paid on its sales to Missouri residents and the use tax it believes it should have paid, arguing that it qualified for the “in commerce” exemption from sales tax set out in section 144.030.1. The Director of Revenue denied the requested refunds. The Administrative Hearing Commission upheld the decision, finding that TracFone’s sales were subject to sales tax under Mo. Rev. Stat. 144.020.1(4) and that TracFone was not entitled to claim the “in commerce” sales tax exemption because the true object of the transactions was the sale of access to telecommunications services in Missouri, and the equipment was merely incidental to the sale of access to those services in Missouri. TracFone filed a petition for review, asserting that, while the sales at issue may be retail sales under section 144.020.1, they qualified for the “in commerce” exemption set out in section 144.030.1. The Supreme Court affirmed, holding that the transactions at issue did not qualify for the exemption set out in section 144.030.1 for sales “in commerce” between states. View "TracFone Wireless, Inc. v. Director of Revenue" on Justia Law

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The Commission determined that Charles and Mary Harter improperly calculated their income eligibility for purposes of the Property Tax Credit (PTC), under sections 135.010 to 135.035 of RSMO Supp., and found that the entire amount of Mr. Harter's social security and annuity payments should be included in their “income” for PTC purposes under section 135.010(5). The Harters seek judicial review of the Commission's finding that the Harters were eligible only for a reduced PTC for the 2010 tax year under section 135.030.2 and that they were not eligible for any PTC for the years 2011-13 because their income exceeded the “maximum upper limit” of income eligibility under section 135.030.1(1). The court concluded that the Commission properly determined the Harters' PTC where the Harters met the disability eligibility criterion and the Commission properly calculated the Harters' "income" for PTC purposes. The court also concluded that the Commission did not err in refusing to estop the Director, and the Commission did not err in granting summary decision. Accordingly, the court affirmed the judgment. View "Harter v. Director of Revenue" on Justia Law

Posted in: Tax Law
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Gate Gourmet, Inc. owns and operates a facility near the Lambert-St. Louis International airport from which it sells frozen meals to various commercial airlines. Gate Gourmet filed sales tax returns for the tax years 2008-2010 in which it reported sales of frozen meals to its airline customers at the reduced sales tax rate of one percent as provided in Mo. Rev. Stat. 144.014. After an audit, the Director of Revenue issued sales tax assessments to Gate Gourmet totaling $296,357, concluding that the sale of airline meals should have been taxed at four percent under Mo. Rev. Stat. 144.020. The Administrative Hearing Commission upheld the Director’s determination. The Supreme Court affirmed, holding that the Commission’s decision was based upon a proper construction of the law and was supported by competent and substantial evidence. View "Gate Gourmet, Inc. v. Dir. of Revenue" on Justia Law