State ex rel. Thompson-Stearns-Roger v. Schaffner
| Decision Date | 08 January 1973 |
| Docket Number | 56802,Nos. 56801,THOMPSON-STEARNS-ROGER,No. 1,MASON-RUST,s. 56801,1 |
| Citation | 489 S.W.2d 207 |
| Parties | STATE ex rel., a joint venture, Appellant, v. James E. SCHAFFNER, Director of Revenue of the State of Missouri, Respondent. STATE ex rel., a joint venture, Appellant, v. James E. SCHAFFNER, Director of Revenue of the State of Missouri, Respondent |
| Court | Missouri Supreme Court |
Lewis, Rice, Tucker, Allen & Chubb, Arthur R. Tucker, St. Louis, Carson, Inglish, Monaco & Coil, Cullen Coil, Jefferson City, for appellant.
John C. Danforth, Atty. Gen., Walter W. Nowotny, Jr., Asst. Atty. Gen., Jefferson City, for respondent.
WELBORN, Commissioner.
Consolidated appeals from denial of relief in mandamus actions to compel approval of claims for refund of sales and use taxes. The trial court quashed the alternative writs and relators appealed.
In 1967, Thompson-Stearns-Roger, a joint venture consisting of Thompson Chemicals Company and Stearns-Roger Corporation, entered into a 'Cost Plus-A-Fixed-Fee Architect-Engineer-Construction-Management Services Contract' with the United States of America pursuant to which Thompson-Stearns would rehabilitate, convert and construct facilities at the Weldon Springs Facility, St. Charles County, Missouri, for the manufacture of a defoliant commonly known as 'Herbicide, Orange.' In carrying out the contract, Thompson-Stearns, from January, 1968 to May, 1969, purchased a variety of tools, materials, construction supplies and other tangible personal property. An aggregate of $43,833.71 in sales and use taxes on such purchases was paid to the State of Missouri. In June, 1969, Thompson-Stearns filed with the Director of Revenue a claim for refund of such taxes. Grounds for refund were generally that title to all of the property involved vested in the United States, which was the 'purchaser,' and therefore the transactions were not subject to the Missouri sales and use taxes.
Mason-Rust, a joint venture consisting of Mason & Hanger-Silas Mason Co., Inc., and The Rust Engineering Company, entered into a 'Cost Plus-A-Fixed-Fee Construction Contract' with the United States, pursuant to which Mason-Rust would rehabilitate, convert and construct facilities at the Gateway Army Ammunition Plant in St. Louis, for the manufacture of 175mm shells. Mason-Rust, in carrying out the contract, between September, 1967 and May, 1969, made purchases of tangible personal property on which sales and use taxes aggregating $103,562.50 were paid to the State of Missouri. Its claim for refund of such taxes, on the same grounds as those stated by Thompson-Stearns, was filed June 13.
On June 27, 1969, the Director of Revenue rejected both claims for refund on the grounds that under Missouri law the contractor was deemed the consumer of tangible personal property used in the performance of a contract, including a contract with the United States.
On July 11, 1969, the claimants filed separate applications in the Cole County Circuit Court for alternative writs of mandamus to compel the Director of Revenue to refund the sales and use taxes for which the claims had been denied. Alternative writs issued.
Motions to dismiss for lack of jurisdiction were filed by the Director on the grounds that relators had failed to exhaust their administrative remedies under § 536.150, RSMo 1969, V.A.M.S. The motions were overruled. Returns to the alternative writs were filed and replies made to such returns. The cases were submitted on stipulated facts. The court quashed the alternative writs and entered judgments against relators. Separate appeals were filed. This court ordered the cases consolidated for argument and opinion.
Before attending to the merits of the appeals, a question of the propriety of the method of relief pursued by the relators must be answered. The respondent, with the support of amicus curiae, would uphold the judgment below on the grounds that the trial court had no jurisdiction to entertain the application for mandamus. Respondent asserts that, upon rejection of the claims for refund, the claimants were obliged to seek review of the Director's decision by way of the State Tax Commission, under § 138.430, RSMo 1969, V.A.M.S., with judicial review thereafter as provided in contested cases, under §§ 536.100 to 536.140, RSMo 1969, V.A.M.S.
The relators assert that under § 144.261, RSMo 1 providing that decisions of the Director in sales tax matters are 'subject to judicial review in the manner provided by chapter 536, RSMo,' they were entitled to judicial review under § 536.150, RSMo, which specifically enumerates mandamus as one method of judicial review.
Section 138.430, subd. 1, RSMo, provides:
This provision was originally enacted as paragraph (4) of § 15 of Law of Mo.1945, p. 1805. Section 15 dealt primarily with the duties of this State Tax Commission relative to property taxation. In the case of Gas Service Co. v. Morris, Mo.Sup., 353 S.W.2d 645, this court, in 1962, held that the provision for review of findings of the Director of Revenue was not limited to property tax matters. In that case, an application had been made to the Director of Revenue for refund of corporate domestication tax. Refund was denied and the taxpayer brought suit. This court held that the suit could not be maintained and that the remedy was administrative review by the State Tax Commission of the Director's refusal, followed by judicial review under §§ 536.100 to 536.140, RSMo 1969, V.A.M.S. In its opinion this court stated that § 138.140 'was meant to include any such finding, decision, etc., (of the Director) made in any matter relating to taxation, and that the legislature did not intend to limit the section's provisions in paragraph one to decisions, etc., relating only to matters involving property taxes.' 353 S.W.2d 654(6, 7).
The sales tax law, on its original enactment, provided for review of determinations of law and fact by the State Auditor in the administration of the law, by certiorari to the auditor from the circuit court in the taxpayer's county of residence, or place of business. Laws of Mo. Extra Sess. 1933--1934, p. 155, § 32, p. 165. In the 1945 General Assembly, in which the sales tax law was amended conformably with the 1945 Constitution to transfer its administration to the Director of Revenue, § 11445, RSMo 1939, providing for certiorari to review decisions of the auditor, was amended to refer to the Director of Revenue, rather than the auditor. Laws of Mo.1945, p. 1865, § 11445, p. 1878. In Kleban v. Morris, 363 Mo. 7, 247 S.W.2d 832, this court held that the procedure for refund of illegal taxes paid under the sales tax law was by filing a claim for refund with the Director of Revenue, followed by judicial review on writ of certiorari, pursuant to § 144.260, RSMo 1949, in which the 1945 amendment of § 11445, supra, appeared. 247 S.W.3d 837(4).
In 1955, the General Assembly repealed § 144.260, RSMo 1949, providing for review by certiorari of sales tax decisions of the Director of Revenue and provided for review of such matters by the State Tax Commission, with judicial review thereafter under §§ 536.100 to 536.140. The 1955 enactment also provided additional compensation for members of the State Tax Commission for the performance of such duty. Laws of Mo.1955, p. 833. The provision for extra compensation appeared as § 138.235, RSMo 1957 Supp. It was repealed by a 'revision' bill of the 70th General Assembly (1959) by which separate provisions for compensation of members of the State Tax Commission were incorporated in a single section. H.B. 107, § 138.230.
In 1961, § 144.261, RSMo 1959, providing for tax commission review of the Director's decisions in sales tax matters was repealed and present § 144.261, RSMo 1969, was enacted. It provides:
'Any final decision, finding, order or ruling of the director, under the provisions of (this chapter) is subject to judicial review in the manner provided by chapter 536, RSMo.'
Respondent and amicus argue that the 1961 repeal of the specific provision for tax commission review of sales tax matters left § 138.430 applicable in such matters, and therefore administrative review by the State Tax Commission was a prerequisite to judicial review. Relators contend that the 1961 amendment was intended to eliminate the tax commission from the review of sales tax matters, and that the decision of the Director was reviewable judicially as provided in § 536.150, in noncontested cases where no administrative review is provided.
The parties agree that, prior to the 1955 amendment above referred to, judicial review of the Director in sales tax matters was direct, by way of certiorari, because of the express provisions of the sales tax law to that effect. The existence of that remedy was noted by the court in the Gas Service case, supra, and the court agreed with the contention there advanced that the express provision for review by certiorari excluded sales tax matters from review under § 138.430. 353 S.W.2d 651. Respondent points to language in that case which he claims holds that § 138.430 is broad enough to extend to all tax matters coming before the Director of Revenue. However, the only matter for decision in that case was a corporate domestication tax refund claim and nothing more than that was decided, whatever the language used.
If the respondent's argument is correct, the 1961 repeal of § 144.261 and the re-enactment of § 144.261 with...
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...a purchase of the property. The U.S. is obligated, per contractual agreement, to reimburse Olin for this purchase. State ex rel. Thompson — Stearns — Roger v. Schaffner, 489 S.W.2d 207 (Mo.1973), is discussed in depth by both parties, each having a much different analysis of the case. This ......
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