512 S.W.2d 915 | Mo. Ct. App. | 1974
The dispute is whether respondent, Standard Home Improvement Co., Inc., is liable for additional occupational license based upon an inclusion in its “gross an
Standard was licensed as a building, contracting or construction company under § 21.86, Code of General Ordinances, 1966, of the City. It engaged in the repair and remodeling of residential and small commercial buildings, the same as Universal. Apparently Universal occupied the same building as does Standard, but on the second floor. There were two outside entrances numbered 1410 and 1414 Westport Road. With the exception of sales people, who were basically independent contractors, the persons employed by Universal are also on the payroll of Standard. Apparently Universal performed only the function of procuring sales for home and other improvements by telephone solicitation, and did not maintain construction and repair crews. These were supplied by Standard which maintained the payroll for the workmen on the jobs, and also paid material bills for lumber and so forth. Upon receipt by Universal of amounts for its sales, it would accumulate them and periodically it would pay them to Standard which deposited them in its bank. Universal reported all amounts received by it as gross annual business to the City and paid its occupational license based thereon.
The reason given by Standard’s secretary and general manager, Mr. Melvin Gardner, why the two affiliated corporations were operating from the same premises, under the same ownership and control, and doing the same type of business was this: “A Basically the reason for the two companies is advertising and method of obtaining leads. Standard advertises on television, radio, television and newspapers and obtains their business leads this way, and recognizes that there was a vast market in the phone solicitation field; so Universal gets their leads from telephone solicitation and Standard gets theirs by advertising.”
The City audited Standard’s books and found that it had excluded from its computation of gross annual business for the years 1966 through 1970 the amounts paid it by Universal which had been paid by Standard for labor and materials in completing Universal’s solicited contracts. That resulted in Standard being in a next higher license fee bracket under Ordinance No. 26967 (Code of Gen.Ord. § 21.86) for the years in question, and an additional amount of license tax for each year of $100.00 as claimed by the City. The trial court ruled that the amount claimed for 1966 was barred by the statute of limitations. The City abandoned its claims for penalties at trial. The trial court ruled the remaining Counts II, III, IV and V for Standard and against the City.
§ 21.36, Code of Gen.Ord. of the City defines “Gross Annual Business” which “shall be taken to mean twelve (12) times the average monthly value of all services performed, goods, wares, merchandise, chattels and all other personal property of every kind and description, bought, sold, loaned or exchanged in the business in question, during the period in which such business shall have been conducted, or for the period of one year next preceding the date upon which the required license becomes due, or if past due and demand is made therefor, then the date of such demand.”
This type of ordinance has been much litigated, 9 McQuillan on Municipal Corporations, § 26.37, p. 90, and cases footnoted, and in this and other states the meaning of “gross annual business” has been set forth. Thus, in State v. Hallenberg-Wagner Motor Co., 341 Mo. 771, 108 S.W.2d 398 (1937), the issue was whether the sales tax was to be computed on the basis of actual
Standard’s records, when audited by Mr. Latimer of the City did show that job costs reimbursements were among Standard’s other receipts for the years in question. Standard argues: “Merely because the reimbursement figures were portrayed under receipts does not mean they (reimbursements) are gross receipts or gross business for purposes of occupation license tax applications. If this were so, then loans to defendant, also reflected as receipts on defendant’s financial statements for the years in question, should also constitute gross receipts or gross business for purposes of occupation license tax application, likewise, proceeds from loans in connection with a debt consolidation transaction for the benefit of a customer.” The argument is untenable because the advances were not treated as loans; they partake more of the nature of sales of labor and material at cost to Universal. They were done pursuant to the carrying out of the business operations, that of repair and remodeling of residential and small commercial buildings, of the two separate corporations, and obviously for the reason that Universal, the corporation closely affiliated with Standard, did not have the work force to carry out construction contracts. The receipts for the advances made by Standard must be treated as a part of its basic business operation, that is, a part of its annual gross business under the terms of the ordinance. As such, the receipts were properly includable in the computation of the license tax due, albeit that the work and materials were furnished at cost, and that computation is to be made “without deduction.”
The case of Simmons Hardware Co. v. City of St. Louis, 192 S.W. 394 (Mo.1917), although involving actual sales of wares, is analogous. There the plaintiff had closely allied corporations in other states to which it sold wares from its St. Louis office at cost, as it did to Simmons Saddlery Company in St. Louis. Simmons Saddlery was a Missouri corporation having a common ownership of stock with plaintiff. Plaintiff sought to recover a portion of its license tax paid based upon sales to these affiliated corporations. As to the corporations in other states, the court said, loe. cit. 192 S.W. 397, “They were all distinct and separate entities, either of which might independently prosper, and survive the others. * * * It sufficiently appears, however, that all the elements of payment and delivery which characterize a sale were present in the transactions. Having voluntarily adopted that method of transacting business, it does not now lie in the mouth
Standard claims that the statute of limitation, § 516.120, RSMo 1969, V.A.M. S., bars the claim for the 1966 occupational license tax. That is true. According to the ordinance, the tax for that year was due March 1, 1966. The petition was filed December 28, 1971, more than five years after the cause of action arose.
The judgment is reversed and the case is remanded with directions to enter judgment for the City of Kansas City, Missouri, for the occupational license taxes due for the years 1967, 1968, 1969 and 1970.
All concur.