Ben Hur Steel Worx, LLC v. Director of Revenue
452 S.W.3d 624
Mo.2015Background
- Ben Hur petitioned the Director of Revenue for sales/use tax refunds under §144.054.2; the Director denied, and the AHC affirmed the denial.
- Ben Hur is a Missouri LLC that subcontracted to furnish and install structural steel components for large commercial buildings.
- Ben Hur purchases steel beams/plates from mills or suppliers and may modify them (cutting, drilling, beveling, welding, etc.).
- If steel components are for a taxable construction project, Ben Hur pays tax; if for a tax-exempt entity, it does not.
- The AHC found Ben Hur’s purchases and activities were construction-related, not the large-scale industrial activities §144.054.2 exempts, and denied the refund requests; the Missouri Supreme Court affirmed.
- Ben Hur’s refund requests sought nearly $200,000 for 2008–2010 jurisdictional months.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether §144.054.2 exempts materials used in construction for non-exempt entities | Ben Hur argues §144.054.2 covers its materials used in manufacturing/producing products, including construction. | Director argues §144.054.2 applies only to large-scale industrial activities, not construction. | No; construction activities are not exempt under §144.054.2. |
| Whether the three-part test for §144.054.2 was met | Ben Hur contends it consumed/used materials in manufacturing/producing a product. | Director maintains failure of any element defeats exemption; the three elements are required. | Ben Hur failed to meet all three criteria; exemption denied. |
| Whether §144.062 construction exemptions and prior practice defeat reliance on §144.054.2 | Ben Hur relied on §144.062 for construction-related exemptions. | Director emphasizes distinct purposes of §144.054.2 vs. §144.062; construction is not within §144.054.2. | §144.054.2 does not encompass construction-related exemptions; §144.062 remains controlling for construction. |
Key Cases Cited
- Union Elec. Co. v. Dir. of Revenue, 425 S.W.3d 118 (Mo. banc 2014) (limits §144.054.2 to large-scale industrial activities)
- AAA Laundry & Linen Supply Co. v. Dir. of Revenue, 425 S.W.3d 126 (Mo. banc 2014) (strict construction against the taxpayer; clear proof required)
- Blevins Asphalt Construction Co. v. Dir. of Revenue, 938 S.W.2d 899 (Mo. banc 1997) (contractors are consumers of materials for construction contracts; not resold)
- Aquila Foreign Qualifications Corp. v. Dir. of Revenue, 362 S.W.3d 1 (Mo. banc 2012) (three-prong test for §144.054.2; burden on taxpayer)
- Parktown Imports, Inc. v. Audi of Am., Inc., 278 S.W.3d 670 (Mo. banc 2009) (contextual approach to statutory interpretation; avoid hyper-technical readings)