St. Louis County v. Prestige Travel, Inc.
2011 Mo. LEXIS 198
| Mo. | 2011Background
- St. Louis County and the St. Louis County Convention and Visitors Commission sue Prestige Travel, an online travel intermediary, for hotel and tourism taxes allegedly owed under county statutes §§ 502.500–502.550 and §§ 67.601–67.626.
- Plaintiff contends Prestige collects discounted rates from hotels but marks up bookings to guests and thereby avoids tax on the marked-up amount; Prestige remits only the discount to operators.
- HB 1442 was enacted during the case to exempt online travel companies like Prestige from the hotel and tourism taxes by stating that taxes apply only to amounts received by hotel operators, not intermediaries.
- Prestige moved to dismiss; the circuit court overruled, but after HB 1442, the circuit court dismissed the petition with prejudice.
- St. Louis County and CVC appeal the dismissal, arguing the tax schemes applied and the Act violated constitutional provisions; the court reviews de novo the validity of the statute in light of constitutional challenges.
- The court ultimately affirms the circuit court’s judgment, holding HB 1442 valid and severable, and declines to resurrect the pre‑HB 1442 tax obligation on Prestige.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| HB 1442 violates Art. III, §39(5) extinguishing indebtedness | Prestige owed pre‑HB 1442 taxes; HB 1442 extinguished indebtedness without consideration | County waived challenge; otherwise lack of pre‑HB 1442 indebtedness established | Waiver; no clear indebtedness shown; no violation. |
| Statutes as of pre‑HB 1442 imposed tax on Prestige | Hotel and tourism taxes applied to operators; Prestige as intermediary bore liability | Obligations limited to operators; Prestige not liable as intermediary | Pre‑HB 1442 statutes did not clearly impose tax on Prestige. |
| Original purpose requirement of HB 1442 | HB 1442's purpose expanded beyond city sales taxes to regulate taxes | Original purpose is broad enough to include tax regulation; germane provisions survive | Not violated; severable provisions survive. |
| Clear title and single subject challenge to HB 1442 | Title too general; sections not germane | Severability permits invalidating problematic sections while preserving rest | Severance appropriate; bill not invalidated in toto. |
| Severability of challenged provisions under Hammerschmidt | Unrelated provisions render entire bill invalid | Provisions are severable; rest of bill remains effective | Hammerschmidt severability doctrine applied; remainder valid. |
Key Cases Cited
- Beatty v. State Tax Comm'n, 912 S.W.2d 492 (Mo. banc 1995) (constitutional challenges require consideration of preexisting indebtedness)
- In re H.L.L., 179 S.W.3d 894 (Mo. banc 2005) (preserving constitutional questions through earliest opportunity)
- Turner v. School Dist. of Clayton, 318 S.W.3d 660 (Mo. banc 2010) (statutory interpretation and context ramach)
- Ross v. Dir. of Revenue, 311 S.W.3d 732 (Mo. banc 2010) (plain meaning and context govern statutory construction)
- St. Louis Country Club v. Admin. Hearing Comm'n of Missouri, 657 S.W.2d 614 (Mo. banc 1983) (strict construction of taxing statutes; express authorization required)
- Hammerschmidt v. Boone County, 877 S.W.2d 98 (Mo. banc 1994) (severability when constitutional defects are not essential to bill's efficacy)
- Rizzo v. State, 189 S.W.3d 576 (Mo. banc 2006) (severability and single-subject considerations in amendments)
- Missouri Ass'n of Club Executives, 208 S.W.3d 885 (Mo. banc 2006) (severability and scope of regulation within bill)
- McEuen ex rel. McEuen v. Missouri State Bd. of Educ., 120 S.W.3d 207 (Mo. banc 2003) (original purpose and scope in constitutional review)