PETITION FOR REVIEW OF A DECISION OF THE ADMINISTRATIVE
HEARING COMMISSION The Honorable Sreenivasa Rao Dandamudi,
PATRICIA BRECKENRIDGE, JUDGE
director of the department of revenue appeals a decision of
the administrative hearing commission ("AHC")
reversing the director's denial of an application for a
sales tax refund. The director asserts the AHC erroneously
ruled David and Jill Kehlenbrink were entitled to a refund of
all the sales tax they paid after their purchase of a new
vehicle. Specifically, the director claims that, in
calculating the sales tax owed on the Kehlenbrinks' newly
purchased vehicle, the plain language of section
144.025.1 unambiguously allows the Kehlenbrinks to
credit the sale proceeds of only one vehicle against the
purchase price of the new vehicle.
144.025.1 unambiguously permits the sale proceeds of only one
vehicle as a credit against the purchase price of a new
vehicle for purposes of calculating sales tax. The AHC
erroneously decided the Kehlenbrinks were entitled to a
refund of all the sales tax they paid because it mistakenly
allowed credit for four vehicles the Kehlenbrinks sold within
180 days of their purchase of a new vehicle. The AHC's
decision is reversed, and the case is remanded.
and Procedural Background
February 26, 2017, the Kehlenbrinks sold a 2006 Ford truck
for $10, 500. Two weeks later, the Kehlenbrinks sold a 2000
Kawasaki motorcycle for $3, 900. On March 14, the
Kehlenbrinks purchased a 2016 Dodge truck for $27, 495. The
Kehlenbrinks titled the Dodge truck on March 31 at an
independently owned St. Louis County license fee
office.When titling the Dodge truck, the
Kehlenbrinks were permitted to credit $14, 400 from the sales
of the Ford and Kawasaki to reduce the sales tax due on the
Dodge truck. Sales tax was assessed on the resulting net
purchase price of $13, 095, and the Kehlenbrinks paid $1, 095
in state and local sales taxes.
Kehlenbrinks subsequently sold a 2008 Jeep for $5, 200 on May
9 and a 2013 Hyundai for $8, 400 on June 5. The dates of sale
of all four vehicles - the Ford, the Kawasaki, the Jeep, and
the Hyundai - were within 180 days of the March 14, 2017,
purchase date of the Dodge truck. Devon Knupp, an employee of
the license fee office who assisted the Kehlenbrinks on all
relevant occasions, informed the Kehlenbrinks they were
permitted to credit the proceeds from the sales of the Jeep
and Hyundai against the prior purchase price of the Dodge.
6, the Kehlenbrinks applied for a refund of sales tax paid on
the titling of the Dodge. This application for refund was
based on the additional credit of $13, 600 derived from the
sale of the Jeep and Hyundai. With this additional credit,
the total credit from all four vehicles exceeded the purchase
price of the Dodge. On July 17, the director denied the
Kehlenbrinks' application for a sales tax refund. The
Kehlenbrinks appealed to the AHC challenging the final
decision of the director.
hearing, the AHC found section 144.025.1 to be ambiguous and
construed it to give credit for the sales of multiple
vehicles against the purchase price of a new vehicle in
computing sales tax owed. It reversed the director's
denial and awarded the Kehlenbrinks a refund of all sales tax
paid, plus interest at the statutory rate.
director appeals the decision of the AHC. This Court has
jurisdiction because the case involves construction of a
state revenue law. Mo. Const. art. V, sec. 3; McDonnell
Douglas Corp. v. Dir. of Revenue, 945 S.W.2d 437, 439
(Mo. banc 1997).
to article V, section 18 of the Missouri Constitution, this
Court reviews the AHC's decision to determine if it is
"authorized by law, and in cases in which a hearing is
required by law, whether the same [is] supported by competent
and substantial evidence upon the whole record."
"The AHC's interpretation of revenue laws is
reviewed de novo." Loren Cook Co. v. Dir. of
Revenue, 414 S.W.3d 451, 453 (Mo. banc 2013).
144.025.1 Unambiguously Limits Credit to One Vehicle
director claims the AHC erred in concluding the Kehlenbrinks
were entitled to credit the proceeds from the sales of four
vehicles against the purchase price of a single newly
purchased vehicle because section 144.025.1 unambiguously
allows credit for the sale of only one vehicle. "The primary
rule of statutory interpretation is to give effect to
legislative intent as reflected in the plain language of the
statute." State ex rel. Young v. Wood, 254
S.W.3d 871, 872-73 (Mo. banc 2008). Words in a statute are
not read in isolation but, rather, are read in the context of
the statute to determine their plain and ordinary meaning.
Union Elec. Co. v. Dir. of Revenue, 425 S.W.3d 118,
122 (Mo. banc 2014). A statute's language is "clear
and unambiguous" if "the statute's terms are
plain and clear to one of ordinary intelligence."
Wolff Shoe Co. v. Dir. of ...