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Fred Weber, Inc. v. Director of Revenue

Supreme Court of Missouri, En Banc

January 13, 2015

FRED WEBER, INC., Respondent,
v.
DIRECTOR OF REVENUE, Appellant

Argued and Submitted November 5, 2014

PETITION FOR REVIEW OF A DECISION OF THE ADMINISTRATIVE HEARING COMMISSION. The Honorable Sreenivasa Rao Dandamudi, Commissioner.

The director was represented by Deputy Solicitor General Jeremiah J. Morgan of the attorney general's office in Jefferson City.

The director, Weber was represented by Aarnardian " Apollo" D. Carey, Anthony J. Soukenik and Jesse B. Rochman of Sandberg Phoenix & von Gontard PC in St. Louis.

Zel M. Fischer, Judge. All concur.

OPINION

Zel M. Fischer, Judge.

Page 629

Fred Weber, Inc. (" Weber" ), a Missouri corporation that operates quarries and asphalt plants, petitioned the Director of Revenue (" Director" ) for a sales tax refund under § 144.054.2.[1] Weber sold rock base and asphalt from its quarries and asphalt plants to Byrne and Jones Enterprises, and Leritz Contracting, Inc. (collectively " paving companies" ) to be used to construct and resurface roads and parking lots. Weber claimed the resurfacing " process" qualified for the exemption. The Director denied the refund, and Weber appealed to the Administrative Hearing Commission (AHC). The AHC reversed the decision of the Director and entered a decision in favor of Weber. The Director petitioned this Court to review the decision of the AHC. The AHC misapplied § 144.054.2.; therefore, its decision is reversed.

Factual and Procedural Background

After Weber sold rock base and asphalt to the paving companies, it loaded the rock base and asphalt onto dump trucks and delivered it to construction sites. The paving companies then used the rock base as a foundation for the asphalt. The asphalt was approximately 300 degrees Fahrenheit upon delivery and had to be poured into place before cooling to a temperature of 175 degrees Fahrenheit. The paving companies did this by using a special piece of equipment called a " paver," which is designed to evenly distribute the asphalt across a section of the rock base. They then used 10-ton rollers and other heavy machinery to compact and level the asphalt before it finally cooled in place.

From October 2008 to September 2009, Weber sold the paving companies approximately $2.6 million worth of rock base and asphalt. In 2011, Weber filed an application for a sales tax refund, under § 144.054.2, of $139,654.62 for those sales. The director denied the request, and Weber appealed to the AHC. The AHC reversed, concluding that Weber qualified for the sales tax exemption under § 144.054.2. The Director petitioned this Court for review of the AHC's decision.

Analysis

This case involves the construction of a revenue law, providing this Court with exclusive appellate jurisdiction. Mo. Const. art. V, § 3; see also ยง 621.189. The AHC ruled in favor of Weber because it concluded that the paving companies were engaged in " manufacturing," " processing," " compounding," or " producing" of a product, entitling Weber to a refund of sales tax paid on the products it sold to the ...


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