PETITION FOR REVIEW OF A DECISION OF THE ADMINISTRATIVE HEARING COMMISSION. The Honorable Sreenivasa Rao Dandamudi, Commissioner.
Five Delta Alpha was represented by Paul V. Herbers, James E. Cooling, Lisa D. Holt and Chad E. Voss of Cooling and Herbers PC in Kansas City.
The director was represented by Solicitor General James R. Layton of the attorney general's office in Jefferson City, and Spencer Adam Martin of the department of revenue in Jefferson City.
Five Delta Alpha, LLC (" FDA" ) filed a complaint with the Administrative Hearing Commission (" AHC" ), appealing the denial by the Director of Revenue (" Director" ) of FDA's use tax refund claim on its purchase and subsequent lease of an aircraft to JetSelect, LLC (" JetSelect" ). The AHC denied FDA the refund, finding the lease to JetSelect did not constitute a " sale" for purposes of the statutory exemption in section 144.030.2(20), RSMo Supp. 2010. The decision of the AHC is reversed, and the matter is remanded.
Factual and Procedural History
FDA purchased a Bombardier Challenger 300 aircraft in Kansas and immediately leased the aircraft to JetSelect. JetSelect then moved the aircraft to Missouri where it has since been based in Kansas City for use in JetSelect's air carrier operations.
FDA paid Missouri use tax in the amount of $1,396,083.33 under protest and filed a tax protest payment affidavit with the Director. FDA asserted that the purchase of the aircraft was eligible for exemption pursuant to section 144.030.2(20), because the aircraft is leased to JetSelect as a common carrier providing air carrier service to the general public pursuant to JetSelect's Federal Aviation Administration certificate. The Director denied FDA's refund, and FDA appealed the Director's decision to the AHC.
The AHC found JetSelect to be a common carrier but concluded that FDA was not entitled to the refund because FDA's lease was not a " sale" for purposes of the resale exemption. FDA appealed the " sale" issue, and the Director cross-appealed the AHC's determination that JetSelect was a common carrier. The Director subsequently dismissed her cross-appeal pursuant to Rule 84.09. This Court has jurisdiction under Article V, Section 3 of the Missouri Constitution because the case involves the construction of the revenue laws of this state.
Standard of Review
" A decision of the AHC will be affirmed if: (1) it is authorized by law; (2) it is supported by competent and substantial evidence based on the whole record; (3) mandatory procedural safeguards are not violated; and (4) it is not clearly contrary to the reasonable expectations of the legislature." Circuit City Stores, Inc. v. Dir. of Revenue, 438 S.W.3d 397, 399 (Mo. banc 2014); Mo. Const. art. V, sec. 18; section 621.193. If the evidence supports either of two opposing findings of fact, deference is afforded to the ...