Director of Revenue v. Superior Aircraft Leasing Co.
734 S.W.2d 504
Mo.
1987
Check Treatment

*1 504 question,7 limi- 180-day that the

sidered III(l) REVENUE, tations of Art. does not com- Appellant, DIRECTOR OF re- proper mence until Missouri authorities v. request disposition ceive a for final AIRCRAFT COM- SUPERIOR LEASING outstanding detainer. PANY, INC., and the Administrative judgment is affirmed. below Hearing the State

Missouri, Respondents. BILLINGS, C.J., WELLIVER, 68857. No. ROBERTSON, RENDLEN and HIGGINS, JJ., concur.

En Banc. BLACKMAR, J., separate concurs in July 1987. opinion filed. Rehearing Denied 1987. BLACKMAR, Judge, concurring.

I was tried concur because defendant County

within 180 of the Jackson

prosecutor’s receipt request of his for dis- through

position, and because was tried 6, 1986, guilty January

plea of which 180 his return from Michi-

gan to Florida on judgment

I reserve about a situation simply request prison officials hold a

which disposition forwarding instead of it to state which has issued detainer. custody certainly frustrate Agreement purpose of the Interstate failing pa- Detainers to forward the can little to

pers, petitioner do himself in such a situation. can-

protect not trans-

not fault the Florida officials for request disposi-

mitting the defendant’s charges after the

tion of the Missouri until Michigan proceedings had

Wisconsin and terminated. Arwood, Or.App. Bielecki, (1983) (citing Colo.App. State v. 46 e.g., People v. 41 Braswell, State, (1978); (1980)); v. 58 P.2d State v. 612 763 Hines 588 378 P.2d 297, 304, (1984); A.2d cert. Conn. 481 Md.App. 473 A.2d 1341 denied, 83 L.Ed.2d Ternaku, N.J.Super. A.2d v. State 437, State, (1984); Fisher, Pinnock v. 384 So.2d (1978); Commonwealth State, (Fla.Ct.App.1980); 265 Ind. Holland (1973); State v. A.2d Pa. (1976); 352 N.E.2d (R.I.1986). Moosey, 504 A.2d White, 234 Kan. P.2d *2 Webster, Gen., Atty. personal William L. Melodie state. No property tax has Powell, Gen., Atty. City, Asst. Jefferson the paid aircraft. ever appellant. Department The of Revenue assessed re- Inglish, City, John W. Jefferson for re- tax, spondent unpaid penalties for and in- spondents. period January for the terest to September appeal, 1981. On the Ad- DONNELLY, Judge. Hearing ministrative Commission held that appeal by This is Rev- the Director of respondent was liable use not for the enue an order the from of Administrative by Department assessed the of Revenue. Hearing invalidating as- the 1986, pertinent RSMo Section tax, sessment of Missouri use 144.- section part, reads: 1986, by Department RSMo of imposed privilege 1. A tax is for the against Superior Revenue Leasing Aircraft using storing, consuming of or Company, Inc. This Court has exclusive jurisdiction pursuant any tangible personal of the this state of cause to Mo. article Const, V, art. property because it involves the ... apply does not § of a construction revenue law of state. storage, respect consump- use or any personal of of tangible tion article dispute There as to the Re- facts. property purchased, produced or manu- spondent-taxpayer, Superior Leas- Aircraft this factured outside state until ing Co., corporation ais Missouri transportation finally of the article has Lebanon, Missouri, office in princi- and its to come rest within this state until the or pal place of Troy, business in On Ohio. commingled has article become with the president Aircraft, general property mass Low, state. purchased Kenneth took delivery Field, at Beech Every person storing, using or con- Wichita, Kansas. The was suming tangible personal in this state (FAA Model 58 Beechcraft Registra- Baron purchased property from a is lia- vendor N427KL). tion fly No. Low intended to law, by ble for the tax plane directly Dayton Air- International liability not extinguished shall un- Vandalia, port Ohio, dark- but because of paid til the tax this state.... safety ness and his concern for in piloting a purposes For use section 144.- darkness, new aircraft decided 605(7), “storage” RSMo defines as stay overnight Lebanon, Missouri. He keeping “the or retention in this state of completed trip following his to Ohio on the tangible personal property purchased from day. any purpose, except a vendor for sale or purchased aircraft was order subsequent solely use outside the state.” lease it Ohio Company, Aviation a com- “use” is defined as “the exercise term pany selling is in business person- any power tangible or over Beech providing aircraft and an air charter ownership property al incident to the service. Aviation leased Ohio the aircraft property, except control of that it does pro- use in the charter service and for storage prop- not include the sale of moting the sale of Upon other aircraft. regular erty in the course of business.” arrival in aircraft 144.605(10),RSMo Section placed immediately pursuant into service the oral lease. When not Ohio levy privilege The use tax is a on the Aviation, respondent was allowed taxing using property pur- within the aircraft business. own state, property chased outside the subject have been to the sales tax would

Respondent delivery in admittedly took purchased had it been at home. South- Kansas to avoid liability Missouri sales Morris, 345 Telephone western Bell Co. v. and use taxes. No sales use tax 1961). (Mo. paid banc Use taxes purchase, storage ever S.W.2d use or Kansas, consistently upheld by aircraft Ohio or in have been Unit- recog- railway maintenance sys- ed Court1 and are of the interstate tem. The serving purpose. pri- explained: dual nized as mary “complement, supple- tois function We think there was a taxable moment ment, protect Manage- the sales tax.” the [goods] when had reached the e.nd 547 S.W.2d ment Services transportation their had 1977). It achieves this begun to be consumed in interstate *3 goal imposing the tax on the “exercise by moment, operations. At that the tax on ownership of property of incidents of that storage and use—retention and exercise subject to the sales tax was not at the time ownership respectively— acquisition” because the commerce was effective. The interstate movement complete, clause of the United Constitution. consumption the interstate White, and Sales Use Taxes-Varia- begun. had not tions, Exemptions, And The In- Aviation Gallagher, Southern Co. v. Pacific of Air 45 Journal Law and Com- dustry, 177, U.S. at 59 S.Ct. 389. (1979-80). so, 509, doing 515-516 In merce If we could assume that “taxable “the incentive purchase it eliminates continuing viability, moment” doctrine has merchants in from order to es- out-of-state finding difficulty no in we would have that thereby cape keeping taxes in- local sales a “taxable moment” did not occur competitive state merchants with sellers However, present the Director case. states,” provides it also and a means Revenue the “taxable mo- contends augment Management state revenues. analysis, adopted by this ment” Court supra Services v. at 468. applied in Management King, Services determining applicability For longer proper is no method deter- adopted “use” Court has and con- tax and mining validity of a state we moment” sistently followed “taxable agree. must analysis recognized first Southern Pa- contemporary approach Unit- 167, Company Gallagher, 306 U.S. cific 59 Supreme ed States Court was announced (1939). See, 83 L.Ed. 586 S.Ct. Complete Brady, Inc. v. Auto Spradling, supra Management Services L.Ed.2d U.S. 97 S.Ct. Service, at v. L & L Marine (1977). The therein “at- Supreme Court 1983). The S.W.2d apparently conflict- tempted clarify theory is is premise main of this that there ing precedents spawned,” has deter- it interstate commerce when a burden on mining the of the Commerce Clause effect period is of time found which commerce. on state taxation of interstate end property has reached the of its inter Taxes, Corp. v. Mobil Oil Commission of yet begun and has not movement 445 U.S. 100 S.Ct. operations. That be consumed in interstate (1980). principle L.Ed.2d 510 The basic period moment.” of time is the “taxable immune is from that interstate commerce theory, it is the Under this when rejected. To- state and local taxation was to be moved in interstate property ceases may constitu- day, “interstate commerce taxable, is rather than the commerce that way.” Mary- tionally pay made interstate commerce itself.2 transaction Louisiana, U.S. land v. (1981),

In L.Ed.2d 576 United States Gallagher, Transit, supra, and application (citing Complete of a California use Auto upheld Revenue, equipment v. Bureau supplies and were Live Stock tax where Western from 58 S.Ct. out-of-state transported to California (1938)). operation in the consumed then Co., inception that a state See, rule e.g., on the v. Silas Mason Henneford 526-27, of interstate impose 81 L.Ed. transaction 57 S.Ct. a tax on the U.S. 814 3; I, section Cl. commerce. U.S. Const.Art. Kentucky, U.S. Randolph & Helson important keep mind "tax- It that the is 73 L.Ed. 49 S.Ct. analysis was based the time able moment” at right to com- of Missouri and The State’s tax interstate maintains business office limited, however, it merce is and no state is reasonable to infer that (1) meetings the board may be sustained unless tax: were conducted ac- State; Missouri Additionally, cordance with law. has a substantial nexus with (2) necessary, Superior fairly Aircraft could have apportioned; does not against used Missouri state courts to enforce reso- discriminate com- arising merce; meetings. lutions from fairly such board related to the Such evidence shows provided by both a “substan- services the State. tial nexus” exists with Missouri and that Louisiana, Maryland v. 451 U.S. at “fairly the tax is related” the services Nevada, 101 S.Ct. at 2133. Vermont and provided the state. challenge when confronted aircraft, imposition of tax on an have The use tax herein is also Complete Transit applied test. apportioned. Multi-state tax burdens can Taxes, *4 v. Commissioner Whitcomb constitutionally be avoided either allow- of 466, (1984); Great 144 164 Vt. 479 A.2d an ing offset or credit sales or use Airways American v. Nevada Tax state, paid in by system taxes another Commission, 422, 101 Nev. P.2d 654 705 apportionment. International Harvest- of also, Lines, Air See Delta Inc. Department er Co. Treasury, 322 of Dept. Revenue, 455 (Fla.1984) 60, 1019, So.2d 317 340, 1035, 64 88 U.S. L.Ed. of (test imposing used state sales tax (1944). Superior paid 1313 Aircraft has not fuel); Burlington purchase of aviation any tax sales use other state and even Ragland, Northern Railroad Co. v. 280 system if it had done so Missouri has a of 182, (test 655 Ark. S.W.2d 437 used paid tax credits for taxes in other states. denying application railway of use tax Section RSMo 1986. equipment). test, remaining element of though plane hang- even discriminatory, requires whether the tax is needed, repairs, ared and were made place greater upon state burden Dayton, Ohio, there were contacts with places upon interstate commerce than it Missouri sufficient to create a substantial competing of like intrastate commerce 2, 1980, During period April nexus. Transit, Complete Auto character. through September 1981, percent 17.7 of at Missouri’s U.S. S.Ct. at 1080. flight logged total hours were tax use makes no distinction between inter- flights solely Superior to Missouri Air- Any and intrastate businesses. busi- state flights, craft’s business. All of these with ness, interstate, intrastate or which makes exception inspecting of one for a con- airplane of purchase an out-of-state site, struction being were recorded as stored, Missouri, is be used or consumed in meetings Superior board Aircraft. The liable for taxation. There is no dis- spent time Missouri for each those crimination since interstate and intrastate ranged days approxi- from several equally commerce are burdened. mately a week.3 Complete prescribed Under the test corpora- imposition

Because Aircraft is a Missouri organized permissible tion and licensed under the tax in this case is under the laws use following listing flights days 3. The f. those in- Oct. 1980—Nov. [7.3 cluding flight actual hours: hours] 2, 1980, May days g. days a. 1980—June March 1981—March [4.9 hours] [4.8 hours] 27, 1980, July July days b. [4.6 April days h. [4.7 1980— 1981— hours] hours] August days August c. days 1980— i. June June [4.8 hours] [4.8 hours] Sept. days d. [6.2 1980 — j. August [5.1 1981— hours] hours] e. [5.4 Oct. 1980—Oct. hours] appellant levy Commerce Clause of the United States Con a use tax under these Management Spra levy stitution. Services v. circumstances and whether dling v. L L & Marine Service under these circumstances violates longer should no followed. the Commerce Clause of United States I, Constitution, Article Section Clause decision Administrative Hear- ing reversed. provides: Section 144.610.1 A imposed privilege tax is for the BILLINGS, C.J., BLACKMAR, storing, consuming using or ROBERTSON, RENDLEN and tangible any personal state article of HIGGINS, JJ., concur. property purchased on or after the effec- tive date of sections 144.600to 144.745 J., WELLIVER, in separate dissents percentage equivalent an amount opinion filed. price in on the sales the sales WELLIVER, Judge, dissenting. law in section 144.020. tax does respectfully dissent. apply respect storage, use tangible Aircraft, consumption article case, Superior In this a Mis- personal property purchased, produced corporation souri with an office in Leba- until or manufactured outside non, Missouri, principal place transportation of article has final- purchased business ly come rest within this state or until Kansas, in order to it to Ohio Avia- lease commingled the article has become hangared Company. tion *5 general property of this the mass of repaired airplane in and Ohio. When the state. Aviation, Superior not was Ohio to use in fact was allowed it. Here, reasons, plane safety the was airplane flights used the on to Missouri night proceeding in Missouri for one before only period question.1 The of the 7% in Ohio. Once in to destination attempted to Department of Revenue has primary plane the was under the control air- impose unapportioned tax on the Aviation, Only when Ohio the lessees.

plane, no other state has since plane using not Aviation was Ohio majority The would allow such tax. trips respondent to it for short allowed disagree majority’s posi- I tax. with the repaired plane and to Missouri. The tion. these circum- hangared in Ohio. Under stances, case, (1) airplane not I think that the did in this There are two issues this 1986,2 “finally rest within state”3 come to whether authorizes RSMo § sense, that, legal airplane logged given is the domi- majority in a strict states 1. that through flight April person place where has his 17.7% its time from cile of a is the However, September trips true, fixed, Missouri. principal to permanent home January period which, is establishment, is whenever he During period, September that 1981. absent, returning. he has the intention airplane logged trips five to Missouri: place as defined that also been Domicile has 1981; days 1. March 1981—March fixed, person’s is with- habitation in which a 27, 1981; days April 2. removing 1981— there- present out intention 1981; 3. June 1981—June from, place properly the domicile and that is 27, 1981; day 4. June voluntarily person fixed which he has of a 1, 1981; days. August 1981— abode, habitation, spe- for a not mere his trips spent airplane of 19 a total present purpose, but with a temporary cial Sep- January between making permanent home. it his intention represents less than 7% 1981. This tember defined, in terms of Domicile has question. elements, particular place, at a as residence statutory herein are to RSMo intention, 2. All references positive accompanied by either 1986, unless otherwise indicated. permanently presumptive, to remain there length of or unlimited or for an indefinite appears require statutory requirement time. airplane. equivalent "domicile” (1941). 1§ C.J.S. Domicile compre- What has been said to be the most hensive and correct definition which appellant statutory and that lacks Appellant authori- dent. respondent seeks to tax as ty respondent. to tax the though the airplane exclusively were used unapportioned Missouri. An tax on an assumes, Even if one arguendo, item only that was related to Missouri 7% 144.610.1 respondent authorizes tax on § not, view, my “fairly the time is circumstances, in these such must apportioned.” fact tax credit pass commerce scrutiny. clause system may apportion the tax majority recognizes: As the impose a states tax does make not Prior law case has established that a fairly apportioned in this case. per state tax is not se invalid because it requirement The fourth is that the tax burdens interstate commerce since inter- fairly “is related provided services may commerce constitutionally be by the state.” the made was han- pay way. Complete gered Respondent Inc. and serviced Brady, Ohio. U.S. 274 [97 only S.Ct. 51 L.Ed.2d utilized Missouri’s services on five See 326] Western Live question. Stock short year Bureau Reve- nue, 303 U.S. 250 Clearly, S.Ct. though L.Ed. which is as levied [58 (1938). The State’s to tax respondent 823] utilized the services limited, however, interstate commerce is state for its throughout year, may no state tax be sustained unles is “fairly provided related the service the tax: has a substantial nexus with by the State.” State; (2) fairly apportioned; (3) support cannot upon taxation based does against not discriminate such transient contacts with Missouri. commerce; related I would affirm the Administrative Hear- provided by services the State. Wash ing Commission of Missouri. ington Dept. Revenue v. Washinton Ste Assn, vedoring 435 U.S. Louisiana,

Maryland

101 S.Ct. 68 L.Ed.2d 576

This is a departure test prior from our

case law. See Management Services v. (Mo. 1977); 547 S.W.2d 466 banc Service, v. L. & L. Marine ADELMAN, In re Robert I. 1983). S.W.2d 524 depar- Respondent. is required by ture and reflects the United Supreme States Court’s clarification of the No. 68116. apparently conflicting precedents in the Supreme Corp. area. Mobil Oil v. Commissioner of En Banc. Taxes, 100 S.Ct. The “taxable prior moment” test case law should be Rehearing Denied new,

replaced four-prong with this test. allegation there is no that the tax

fails to fulfill the first third of the

requirements announced the United problems Court. The majority’s analysis arise sec- requirements.

ond and fourth requirement

The second In apportioned.”

“is this case the

airplane spent only 7% respon- to Missouri for