State ex rel. Ozark Lead Co. v. Goldberg

• Decision Date: 09 February 1981
• Docket Number: No. 1,No. 62348,62348,1
• Citation: 610 S.W.2d 954
• Parties: STATE of Missouri ex rel. OZARK LEAD COMPANY, Respondent, v. Gerald H. GOLDBERG, Director of Revenue of the State of Missouri, Appellant
• Court: Missouri Supreme Court

Page 954

610 S.W.2d 954

STATE of Missouri ex rel. OZARK LEAD COMPANY, Respondent, v. Gerald H. GOLDBERG, Director of Revenue of the State of Missouri, Appellant.

No. 62348.

Supreme Court of Missouri, Division No. 1.

Feb. 9, 1981.

Christopher M. Lambrecht, Asst. Atty. Gen., Jefferson City, for appellant.

Kelly Pool, Jefferson City, for respondent.

WELBORN, Commissioner.

Proceeding for reassessment of sales and use taxes. The Director of Revenue assessed sales and use taxes and penalties in the amount of $38,300.97 against Ozark Lead Company. The taxes were paid under protest and the taxpayer on August 8, 1976 filed a petition for reassessment pursuant to Section 144.200, RSMo 1969. The protest was heard by the Hearing Officer of the Department of Revenue on April 17, 1978. His decision, denying relief, was rendered April 6, 1979. Taxpayer filed a petition for judicial review in the Circuit Court of Reynolds County. Findings of fact, conclusions of law and judgment reversing the decision of the Director of Revenue were entered by the Circuit Court on December 6, 1979. The Director has appealed.

In this Court the first complaint of the Director is that the final decision of the Director, having been rendered April 6, 1979, after the effective date of S.B. 661 of the 79th General Assembly, was reviewable originally by the Administrative Hearing Commission under Section 144.261, RSMo 1978, and, therefore, the circuit court had no jurisdiction to hear the matter. This contention has been answered in Labrayere v. Goldberg, 605 S.W.2d 79, 82-85(1) (2) (Mo. banc 1980). The holding of that case, contrary to the contention of the appellant, is dispositive.

The only question presented is whether or not the purchases of machinery and equipment upon which the taxes were assessed are exempt from sales and use tax by reason of Section 144.030.3(4), as "Machinery and equipment * * * purchased and used * * * to expand existing * * * mining plants in the state * * *." The operative facts are not in dispute. The findings of the Department Hearing Officer set them out fairly as follows:

"Ozark Lead Company operates a deep underground mine near Sweetwater, Missouri. The mining horizon is approximately 1,000 feet below ground. The mine was opened in 1968 and produces Galena Sphalerite Ore. The ore is in a host rock dolomite or limestone. The Galena and Sphalerite are removed from the host rock and concentrated into a saleable product. * * * A wide, flat ore body was initially anticipated when this mine was opened but this ore was found to be very low grade. As a result of the ore not being located as it was originally thought, Ozark Lead's mining concepts had to change, and it was necessary for the mine to be developed vertically as well as horizontally and to be expanded laterally in order to mine the desired amount and quality of ore. As a result of the unanticipated location of the ore, some new and different types of machinery had to be purchased since the old equipment was not designed for the new areas.

"Among the purchases here at issue is the purchase of (five) Load Haul Units. * * * Since it was necessary for the mine to be developed vertically as well as horizontally, it was necessary to construct numerous ramps in the mine, three or four ramps being required in every area of work. The new units had to be purchased since the load haul units had to be more powerful to negotiate these inclines and ramps. Furthermore, new load haul units are more versatile than the older units in that the new units can dump in holes below the units, in storage pockets above the railroad, or in railroad cars themselves. The older units could only dump in holes under the cars and additional dumping techniques had to be developed due to the changed nature of the mine. It is also possible for the new load haul units to stock pile ore and to keep the mine faces free for production. These more versatile units are required since that ore did not occur as originally anticipated and it was necessary to expand the mine vertically and horizontally to continue its operation.

"Changing ore body and the necessity of mining different types of areas also required the purchase of two Sien-Brute Powder Loading Boom Trucks. These are utility vehicles used to make mining faces safe and to load explosives in blast holes. As a result of the changing ore body, it was necessary to develop more drifts or tunnels in order to maintain production, and this...