Citizens Bank and Trust Co. v. Director of Revenue, State of Mo., 63387

• Citation: 639 S.W.2d 833
• Decision Date: 12 October 1982
• Docket Number: No. 2,No. 63387,63387,2
• Parties: CITIZENS BANK AND TRUST COMPANY, Appellant, v. DIRECTOR OF REVENUE, STATE OF MISSOURI, Respondent
• Court: United States State Supreme Court of Missouri

Page 833

639 S.W.2d 833

CITIZENS BANK AND TRUST COMPANY, Appellant, v. DIRECTOR OF REVENUE, STATE OF MISSOURI, Respondent.

No. 63387.

Supreme Court of Missouri,

Division No. 2.

Oct. 12, 1982.

Robert E. Fitzgerald, Jr., Dale H. Sizemore, Jr., Hoskins, King, McGannon, Hahn & Hurwitz, Kansas City, for appellant.

John Ashcroft, Atty. Gen., Richard L. Wieler, Asst. Atty. Gen., Jefferson City, for respondent.

ALDEN A. STOCKARD, Senior Judge.

This is an appeal from the decision of the Administrative Hearing Commission sustaining an assessment of additional bank tax against Citizens Bank and Trust Company pursuant to § 148.010, et seq. RSMo 1978. The case involves construction of a revenue law. Therefor, this Court has exclusive appellate jurisdiction. Mo.Const. art. V, § 3. We affirm the decision of the Administrative Hearing Commission.

The facts, as stipulated by the parties, are these: Citizens Bank and Trust Company is a Missouri banking institution and a sole and wholly owned subsidiary of Citizens Bancshares Co., a holding company. The bank's principal place of business is located in Chillicothe. The bank owns various pieces of real estate in Livingston County. Twenty-five percent of the total footage of this real estate was leased to third parties on month-to-month oral leases. The bank paid real estate taxes on these properties in the amount of $12,959.05 in 1976; $13,395.86 in 1977; $13,541.79 in 1978; and $14,066.40 in 1979. In each of these years the bank claimed as a credit pursuant to § 148.030.3, RSMo 1978, a sum representing 75% of the total real estate taxes paid in that year: $9,719.28 in 1976; $10,046.89 in 1977; $10,156.34 in 1978; and $10,549.80 in 1979.

In 1979 the Department of Revenue sent a Notice of Financial Institution Tax Assessment to the Bank indicating an assessment for failure to remit payment of $324.20 in 1976; $9,328.62 in 1977; and $9,343.60 in 1978. Interest on these sums was also assessed. In 1980 a similar notice indicating assessment for $9,445.39 plus interest for the year 1979 was sent to the Bank. The Bank in turn filed separate complaints with the Administrative Hearing Commission in reference to each of the two notices. The Bank maintained that § 148.030.3, RSMo 1978, as amended in 1972, permitted a credit for taxes it paid on real estate which was not held for lease or rental to others, disallowing only credits against the tax on real estate which was held for lease or rental. The Commission held that the intent of § 148.030.3 was to disallow credits against the tax imposed by §§ 148.010-148.110 for taxes paid on tangible personal property owned by the taxpayer and held for lease or rental to others, but not to change the treatment of real estate taxes. Under this ruling, the Bank could not credit its real estate taxes on property it did not lease or rent. The case was remanded by the Hearing Commission to the Department of Revenue for the proper recalculations. Appellant then sought review in this Court under § 161.337, RSMo 1978.

Section 148.030, RSMo 1978, the revenue statute pursuant to which the Bank claimed credit for its real estate taxes states:

1. Every national banking association and every other banking institution shall be subject to an annual tax for the privilege of exercising its corporate franchises within the state according to and measured by its net income for the preceding year.

2. The rate of tax for each taxable year shall be seven percent of such net income.

3. Each taxpayer shall be entitled to credits against the tax imposed by this law for all taxes paid to the state of Missouri or any political subdivision thereof during the relevant income period, other than taxes on real estate and tangible personal property owned by the taxpayer and held for lease or rental to others, contributions paid pursuant to the unemployment compensation tax law of Missouri, and taxes imposed by this law. (Emphasis added.)

The phrase "and tangible personal property owned by the taxpayer and held for lease or rental to others" was added to the statute in a 1972 amendment. The only issue here is the correct interpretation of this statute as amended. It is the Bank's contention that "owned by the taxpayer and held for lease or rental to others" now modifies not only the term "tangible personal property," but also "real estate." Therefore, a credit for taxes paid on real estate not held for lease or rental is allowable. It is the Department of Revenue's position that the phrase was intended to stand by itself and not refer back to the term "real estate." Therefore, there is no credit allowable for taxes paid on any type of real estate.

The primary objective of statutory construction is to ascertain the intent of the legislature from the language used, and to give effect to that intent if possible. In doing so we are to consider the words used in the statute in their plain and ordinary meaning. State v. Kraus, 530 S.W.2d 684, 685 (Mo. banc 1975).

When the same or similar words are used in different places within the same legislative act and relate to the same or similar subject matter, then the statutes are in pari materia and should be construed to achieve a harmonious interpretation of the statutes. City of Raytown v. Danforth, 560 S.W.2d 846, 848 (Mo. banc 1977). Sections 148.110, 148.030, and 148.040, RSMo 1978, all relate to the special tax on banks. Each was amended in 1972 by the...