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Alberici Constructors, Inc. v. Dir. of Revenue

Supreme Court of Missouri, En Banc

January 13, 2015

ALBERICI CONSTRUCTORS, INC., Appellant,
v.
DIRECTOR OF REVENUE, Respondent

Argued and Submitted September 2, 2014

Page 633

PETITION FOR REVIEW OF A DECISION OF THE ADMINISTRATIVE HEARING COMMISSION. The Honorable Marvin O. Teer, Jr., Commissioner.

Alberici was represented by Edward F. Downey and Carol L. Iles of Bryan Cave LLC in Jefferson City.

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

PATRICIA BRECKENRIDGE, JUDGE. All concur.

OPINION

PATRICIA BRECKENRIDGE, JUDGE.

Page 634

Alberici Constructors, Inc., seeks review of a decision of the administrative hearing commission (AHC) denying Alberici's claim for a refund of use taxes paid. In its petition for review, Alberici asserts the AHC erred in finding it owed use taxes on Alberici's out-of-state rentals of cranes and a welder because the cranes and welder are " materials" that were used solely to construct or install manufacturing equipment at a new cement manufacturing plant in Missouri and, therefore, exempt from the imposition of use tax under section 144.030.2(5).[1] Alberici also asserts the AHC erred in finding Alberici owed use taxes on a charge for the delivery of one of the cranes to the manufacturing job site.

This Court finds Alberici owed use taxes on the rentals of the cranes and the welder because the legislature did not intend the term " materials" in section 144.030.2(5) to include cranes and welders. The Court further finds that the delivery service was a part of the crane rental and that the delivery charge was subject to the assessment of use taxes. Accordingly, the decision of the AHC is affirmed.

Factual and Procedural Background

In 2006, Alberici entered into a joint venture to build a new cement manufacturing plant in Missouri for Holcim (U.S.), Inc. Under the agreement, Alberici was responsible for installing and constructing the steel supports and cement manufacturing equipment provided by Holcim. To install and construct the equipment, Alberici rented five " massive industrial cranes" from three out-of-state vendors. The rental agreements with each vendor referred to the cranes as " equipment." Additionally, Alberici rented a welder. The invoice

Page 635

for the welder was styled " MACHINE RENTALS." Alberici paid $440,075.39 for the rental of the cranes and the welder.

Included in the $440,075.39 total cost was a $15,000 charge paid to Bulldog Erectors, Inc., for the transportation of a crane rented from Bulldog Erectors to the manufacturing job site. The rental agreement for that crane, which the parties signed on November 4, 2008, provided:

6. TRANSPORTATION:
Inbound Transportation: $15,000.00
Outbound Transportation: $15,000.00
*Receive, unload, assemble, disassemble and load out is by customer.
Transportation: Lessee will arrange for and pay all shipping and freight from the shipping point to the job site . . . and returned to the return point, including but not limited to, demurrage, unloading, assembly, disassembly, load-out, handling, packing, crating, ...

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