Pac-One Inc v. Daly

• Decision Date: 28 November 2000
• Citation: 37 S.W.3d 278
• Parties: (Mo.App. E.D. 2000) Pac-One, Inc., Appellant, v. Gregory F.X. Daly, License Collector of the City of St. Louis, Respondent. ED78149
• Court: Missouri Court of Appeals

37 S.W.3d 278 (Mo.App. E.D. 2000)

Pac-One, Inc., Appellant, v. Gregory F.X. Daly, License Collector of the City of St. Louis, Respondent.

ED78149

Missouri Court of Appeals Eastern District

11/28/2000

Appeal From: Circuit Court of the City of St. Louis, Hon. Robert H. Dierker, Jr.

Counsel for Appellant: Thomas L. Caradonna, Lawrence H. Weltman and Douglas M. Nieder

Counsel for Respondent: Thomas J. Ray, Patricia L. Wendling, James J. Wilson and Mark J. O'Toole

Opinion Summary: Taxpayer Pac-One, Inc., appeals the judgment dismissing its petition in mandamus seeking to compel the License Collector of the City of St. Louis to recover and impound taxes paid under protest pursuant to section 139.031, RSMo Cum. Supp. 1999.

Division Three holds: The taxpayer could not rely on section 139.031.3 because it had not filed an appeal with the State Tax Commission nor given notice of such filing in its protest letter. Nor could taxpayer rely on section 139.031.2 because it failed to file suit seeking recovery of the protested taxes within ninety days of filing its protest. Accordingly, Collector did not err in declaring its protest null and void and disbursing the escrowed taxes.

Lawrence. G. Crahan, Judge

Opinion modified by Court's own motion on December 5, 2000. This substitution does not constitute a new opinion.

Pac-One, Inc., ("Taxpayer") appeals the judgment dismissing its petition in mandamus seeking to compel the License Collector of the City of St. Louis ("Collector") to recover and impound taxes paid under protest pursuant to section 139.031 RSMo Cum. Supp. 1999.¹ We affirm.

The relevant facts are not in dispute. Taxpayer is a manufacturer located in the City of St. Louis and is subject to the manufacturer's tax pursuant to the provisions of section 150.300 et. seq. Collector is responsible for assessment and collection of the tax. Taxpayer received a 1998 manufacturer's tax bill from Collector. In January 1999, Taxpayer paid the taxes under protest and delivered to Collector its protest letter protesting ninety percent of the tax, stating its grounds of protest and seeking review of the assessment by the Merchants' and Manufacturers' Board of Tax Equalization of the City of St. Louis ("Board"). The letter did not contain any notification that an appeal had been filed with the State Tax Commission.

Collector impounded Taxpayer's protested payment in a separate interest-bearing account pending resolution of Taxpayer's appeal. The Board scheduled a hearing for March 30, 1999, but later postponed the hearing. Taxpayer did not file an action in the circuit court seeking recovery of the protested payment. On May 20, 1999, Collector sent Taxpayer a letter declaring Taxpayer's protest null and void and notifying Taxpayer that its protested payment had been disbursed to the proper taxing authorities pursuant to section 139.031.2.

Taxpayer filed a petition in mandamus seeking an order requiring Collector to replace the disbursed funds into the escrow account, with interest, to identify the parties to whom funds were disbursed and to enjoin use of the funds. The petition in mandamus alleged that because Taxpayer had timely paid its taxes under protest and timely appealed the assessment of its property to the Board, Collector had a duty to impound and hold the protested taxes in a separate fund. Taxpayer urged that section 139.031.3 evidenced a legislative intent to make it unnecessary for Taxpayer to file a circuit court action for the refund of the taxes it had paid under protest. The trial court issued its preliminary order in mandamus and Collector filed a motion to dismiss, which was ultimately sustained. This appeal followed.

Taxpayer's sole point on appeal is that the trial court erred in dismissing its petition in mandamus because it adequately complied with section 139.031.3. Mandamus lies only when there is an unequivocal showing that a public official failed to perform a ministerial duty imposed by law. Bergman v. Mills, 988 S.W.2d 84, 88 (Mo. App. 1999). To be entitled to relief, there must be a showing that the applicant has a clear, unequivocal, specific, and positive right to have performed the act demanded. Id. This court determines whether the right to mandamus is clearly established and presently existing by examining the statute under which the right is claimed. See id.

Manufacturers dissatisfied with the Collector's assessment may protest all or part of the tax pursuant to section 139.031. Section 139.031 provides, in relevant part:

1. Any taxpayer may protest all or any part of any taxes assessed against him, except taxes collected by the director of revenue of Missouri. Any such taxpayer desiring to pay any taxes under protest shall, at the time of paying such taxes, file with the collector a written statement setting forth the grounds on which his protest is based. The statement shall include the true value in money claimed by the taxpayer if disputed.

2. Upon receiving payment of taxes under protest pursuant to subsection 1 of this section or upon receiving notice of an appeal pursuant to section 138.430, RSMo the collector shall disburse to the proper official all portions of taxes not disputed by the taxpayer and shall impound in a separate fund all portions of such taxes which are in dispute. Except as provided in subsection 3 of this section, every taxpayer protesting the payment of taxes shall, within ninety days after filing his protest, commence an action against the collector by filing a petition for the recovery of the amount protested in the circuit court of the county in which the collector maintains his office. If any taxpayer so protesting his taxes shall fail to commence an action in the circuit court for the recovery of the taxes protested within the time prescribed in this subsection, such protest shall become null and void and of no effect, and the collector shall then disburse to the proper official the taxes impounded, and any interest earned thereon, as provided above in this subsection.

3. No action against the collector shall be commenced by any taxpayer who has, for the tax year in issue, filed with the state tax commission a timely and proper appeal of the protested taxes. Such taxpayer shall notify the collector of the appeal in the written statement required by subsection 1 of this section. The taxes so protested shall be impounded in a separate fund and the commission may order all or any part of such taxes refunded to the taxpayer, or may authorize the collector to release and disburse all or any part of such taxes in its decision and order issued pursuant to chapter 138, RSMo.

The requirements of section 139.031 must be strictly construed and enforced. Stanton v. Wal-Mart Stores, Inc., 25 S.W.3d 538, 541 (Mo. App. 2000). Section 139.031 provides the taxpayer with an exclusive remedy, and therefore, failure to strictly comply with this section bars recovery of the controverted taxes. Id.

If the taxpayer has not resolved its complaint with the Collector before the tax is due, it must pay the tax and file with the Collector a written statement setting forth the grounds on which the protest is based. Section 139.031.1; see Council House Redevelopment Corp. v. Hill, 920 S.W.2d 890, 891 (Mo. banc 1996). Upon receiving payment of the tax under protest, the Collector must impound in a separate fund all disputed portions. Section 139.031.2.

Taxpayers must also exhaust their administrative remedies. See Local Union No. 124, Int'l Bros. of Elec. Workers v. Pendergast, 891 S.W.2d 417, 419 (Mo. banc 1995). Initially, taxpayers must appeal Collector's assessment of their property to the Board pursuant to section 138.180. See Nexus Rent-A-Car, Inc. v. Nash, 747 S.W.2d 683, 687 (Mo. App. 1988). Next, taxpayers may appeal the Board's decision to the Commission under section 138.430.1. Id. Finally, taxpayers may seek judicial review of the Commission's decision under section 138.430.1. See Pendergast, 891 S.W.2d at 418.

A third step may be required. Before the 1983 amendment to section 139.031, taxpayers, in addition to filing an administrative appeal, were required to commence a separate judicial proceeding against the Collector to obtain a refund of the amount of taxes paid under protest ("refund suit"). See section 139.031.2; Xerox Corp. v. Travers, 529 S.W.2d 418, 422 (Mo. banc 1975). The refund suit...