The MAY DEPARTMENT STORES COMPANY, d/b/a Famous-Barr Co., Appellant, v. DIRECTOR OF REVENUE, State of Missouri, Respondent.
No. 69659.
Supreme Court of Missouri, En Banc.
March 15, 1988.
Rehearing Denied April 19, 1988.
748 S.W.2d 174
William L. Webster, Atty. Gen., Richard L. Wieler, Asst. Atty. Gen., Jefferson City, for respondent.
BLACKMAR, Judge.
The appellant operates department stores in the St. Louis area and elsewhere. The Director of Revenue levied separate assessments for sales tax and for use tax. The Administrative Hearing Commission sustained these assessments and the taxpayer appealed to this Court. We have jurisdiction because construction of the revenue laws is involved. We find that the petition for review is well taken as to both assessments and reverse.
I. Use Tax
The appellant causes catalogs describing its merchandise to be printed in Illinois. It supplies mailing labels to the printer, who mails the printed catalogs directly to the addresses. The director sought to collect Missouri use tax on those catalogs which were mailed by the Illinois printer to Missouri addresses.
The case bears some similarity to R & M Enterprises, Inc. v. Director of Revenue, 748 S.W.2d 171 (Mo. banc 1988) (decided today). We need not repeat the general discussion of the use tax found in that case. There is, however, a controlling difference between that case and this one.
The use tax is imposed “for the privilege of storing, using, or consuming within this state any article of tangible personal property....” The appellant does not exercise any of the privileges listed in the statute, and so does not owe a tax levied on those privileges.
The director points out that, had a Missouri printer been used, the cost of printing would have been subject to sales tax. He then argues that the purpose of the use tax statutes will not be fulfilled if the taxpayer is able to benefit by causing its printing to be done outside the state. This may be so, but the director still must point to a statutory incident which causes the tax to attach. This he has not done.
The director claims the benefit of the “presumption” of
This appellant, however, does not engage in the “storage, use or consumption” of the catalogs in Missouri. The presumption, then, does not aid the director in collecting the tax from this taxpayer. It cannot be said to store, use or consume the catalogs in Missouri by giving directions which are executed outside the state.
Our position is supported by Hoffmann-LaRoche, Inc. v. Porterfield, 16 Ohio St.2d 158, 243 N.E.2d 72 (Ohio 1968); Bennett Brothers Inc. v. State Tax Commission, 62 A.D.2d 614, 405 N.Y.S.2d 803 (1978); and District of Columbia v. W-Bell & Company, Inc., 420 A.2d 1208 (D.C.App. 1980).
Because the taxpayer does not seek to exercise any of the privileges which give rise to the tax, we need not reach the constitutional points raised by the taxpayer. It of course is not appropriate for us to speculate as to whether the state may adopt statutory language which would reach the transactions here described. Nor is there any issue before us as to the fanciful possibility that the use tax might be assessed against an addressee who accepts a catalog.
II. Sales Tax
The director sought to impose Missouri sales tax on sales during 1979, in which the buyer, who we will assume to have been in Missouri, directed the appellant-seller to make delivery in another state, by mail or common carrier.
The tax is imposed upon “every retail sale in this state.”
any transfer ... of the ownership of, or title to, tangible personal property to the purchaser, for use or consumption and not for resale ... for a valuable consideration.
We agree with the taxpayer that, when a contract of sale requires the seller to make delivery, title to the goods does not pass until delivery is made. This is the purport of the Uniform Commercial Code,
The state points out that our sales tax is a “gross receipts” tax rather than a “transactions tax.” By
We do not agree. The case relied on was one in which a Missouri contractor ordered materials and supplies to be delivered to a job site in Missouri, at which the contractor was doing work for the federal government. The construction contract provided that title to all materials and supplies was to vest in the government on delivery to the job site, and the contractor set up this circumstance in support of an argument that the sales were exempt from any sales tax because made to an exempt entity. This Court observed that the materials were available for the contractor‘s unrestricted use at the job site, and found an “ownership” sufficient to support the tax, in spite of the parties’ attempts to place legal title elsewhere.
Here, in general contemplation of law neither title nor ownership passed until delivery. There is reason behind the conceptual approach, for risk of loss in transit remained in the seller. The sales were not retail sales in Missouri, in the sense of
We reach this conclusion without considering
There is likewise no occasion to consider the constitutional claims presented by the taxpayer. Just as with the use tax, it is not our place to speculate as to whether the legislature might tax transactions of the kind here in issue, by using appropriate language.
The decision of the Administrative Hearing Commission is reversed.
BILLINGS, C.J., and DONNELLY, WELLIVER and RENDLEN, JJ., concur.
ROBERTSON, J., concurs in part and dissents in part in separate opinion filed.
HIGGINS, J., concurs in part and dissents in part and concurs in separate concurring in part and dissenting in part opinion of ROBERTSON, J.
ROBERTSON, Judge, concurring in part and dissenting in part.
I concur in that portion of the principal opinion which holds that petitioner has no liability for use tax in this case. However, as to that portion of the principal opinion, designated II, which finds that no sales tax is due, I respectfully dissent.
Under the facts of this case, a purchaser in Missouri enters appellant‘s store in Missouri, purchases merchandise from appellant, and directs appellant to deliver that item to a third party in another state. In my view, such a transaction is a sale at retail subject to sales tax.
Section
In my view, Thompson-Stearns-Roger correctly interprets the law and requires a result contrary to that reached by the majority. It is beyond dispute that when a person enters the business establishment of a Missouri merchant, selects an item of merchandise, pays for it, and directs that the merchandise purchased be delivered to a third party, the purchaser has exercised dominion and control over that merchandise. Dominion and control establish ownership; sales tax is thus due on the transaction under the clear language of
The majority‘s attempt to distinguish — nay overrule sub silentio — Thompson-Stearns-Roger is not persuasive. The factual differentiation recited does not support the legal distinction the majority draws. Ownership within the meaning of
While I agree that the decision of the Administrative Hearing Commission regarding the use tax must be reversed, I would affirm the decision of the Administrative Hearing Commission upholding the imposition of the sales tax under these facts. I, therefore, concur in part and dissent in part.