Fostaire Harbor, Inc. v. Missouri Director of Revenue, 65743

• Decision Date: 20 November 1984
• Docket Number: No. 65743,65743
• Citation: Fostaire Harbor, Inc. v. Missouri Director of Revenue, 679 S.W.2d 272 (Mo. 1984)
• Parties: FOSTAIRE HARBOR, INC., a corporation, Appellant, v. MISSOURI DIRECTOR OF REVENUE and Administrative Hearing Commission of Missouri, Hon. Hugh A. Sprague, Commissioner, Respondent.
• Court: Missouri Supreme Court

Page 272

679 S.W.2d 272

FOSTAIRE HARBOR, INC., a corporation, Appellant, v. MISSOURI DIRECTOR OF REVENUE and Administrative Hearing Commission of Missouri, Hon. Hugh A. Sprague Commissioner, Respondent.

No. 65743.

Supreme Court of Missouri En Banc.

Nov. 20, 1984.

Rene E. Lusser, St. Louis, for appellant.

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

HIGGINS, Judge.

Fostaire Harbor, Inc., seeks reversal of a decision upholding an assessment of sales tax plus interest on fees paid to Fostaire for rides in its helicopter flights over historic sights in St. Louis. Fostaire asserts these fees are not subject to sales tax during the assessment period, under section 144.020(2), RSMo, because the rides were for educational purposes, not "amusement" as covered by the statute. Fostaire argues also that if the assessment was correct, the Commission finding of no neglect or refusal to file a return would preclude assessment of interest. Affirmed.

The Department of Revenue issued its assessment of unpaid sales tax together with interest on December 27, 1979, for the period July 1, 1977, to June 30, 1979. The Administrative Hearing Commission upheld the assessment for the amount representing the statutory period December 28, 1977, to the date of assessment December 27, 1979, and remanded for recalculation accordingly. The decision of the Administrative Hearing Commission "shall be upheld when authorized by law and supported by competent and substantial evidence upon the whole record...." § 161.338, RSMo 1978.

Fostaire Harbor, Inc., a Missouri corporation, provides helicopter flights which begin and end at a barge moored in the Mississippi River, have planned courses lasting from 5 to 25 minutes, and provide no unusual movements designed for thrills. The Department of Revenue characterized fees paid for these flights as "for admission and seating accommodations, or fees paid to, or in any place of amusement, entertainment or recreation," and thus subjected them to sales taxes. § 144.020, § 144.010, RSMo 1983 Supp.

I.

Appellant contends the flights in question were not forms of amusement, entertainment, or recreation, because such interpretation was not given to section 144.020(2), RSMo, until enactment of a revised rule of the Code of State Regulations after the tax assessment period. 12 CSR 10-3.176.

The rule revision provided examples of places that would be treated as a place of amusement. This does not "clearly show a change in interpretation of this tax law" as appellant contends. The revision simply included helicopter flights as examples of places of amusement for purposes of the tax.

Appellant reminds of the rule that all statutes relating to taxation are to be strictly and narrowly construed against the taxing authority and in favor of the taxpayer. Goldberg v. Administrative Hearing Commission, 609 S.W.2d 140, 144 (Mo.1980). The rule is not involved here because the language of section 144.020.1(2) is clear and unambiguous.

This Court has construed the statutes in question as requiring two things to assess sales taxes: First, there must be fees or charges; and second, those fees or charges must be paid in or to a place of amusement, entertainment or recreation. L & R Distributing, Inc. v. Missouri Department of Revenue, 529 S.W.2d 375, 378 (Mo.1975). The second requirement is at issue here. Helicopter tours of historic sites can be educational, but they are also entertaining and recreational. These are not mutually exclusive. In Wien v. Murphy, 28 A.D.2d 222, 284 N.Y.S.2d 303, 306 (1967), the court said that "if in fact a place or facility provides...