Case Title: Brinker Missouri, Inc., Appellant, vs. Director of Revenue, Respondent.

Citation: 

Docket Number: SC90463

State: missouri

Court: Missouri Supreme Court

Date: 2010-08-31T00:00:00Z

Document:
SUPREME COURT OF MISSOURI 
en banc 
 
 
BRINKER MISSOURI, INC.,  
) 
 
 
 
 
 
 
) 
 
Appellant, 
 
 
 
) 
 
 
 
 
 
 
) 
vs. 
 
 
 
 
 
) 
No. SC90463 
 
 
 
 
 
 
) 
DIRECTOR OF REVENUE, 
 
) 
 
 
 
 
 
 
 
) 
 
Respondent.  
 
 
) 
 
PETITION FOR REVIEW OF A DECISION OF THE 
ADMINISTRATIVE HEARING COMMISSION 
 
Opinion issued August 31, 2010 
 
Brinker Missouri, Inc. seeks review of an Administrative Hearing Commission 
decision correctly determining that Brinker’s purchases of kitchen equipment and other 
items were not exempt from use tax pursuant to sections 144.030.2(4) and (5)1 and that 
Brinker’s purchases of non-disposable tableware, cutlery, chairs, tables and similar items 
for use by its customers were not exempt from use tax pursuant to section 144.615(6).  
Brinker does not qualify for the exemptions under sections 144.030.2(4) and (5) because 
its restaurants are not “plants” and because it prepares and serves food rather than 
manufactures a product.  Brinker also is not entitled to claim a resale exemption under 
section 144.615(6) or a sale exclusion under section 144.605(13).  It neither permanently 
transfers nor charges its customers additional consideration for giving them the privilege 
                                             
 
1 All statutory references are to RSMo 2000 unless otherwise indicated. 
of sitting in a chair and using silverware to eat their meals on a dish or drink their soup 
from a bowl or tea in a glass while sitting at a table.  The Court rejects Brinker’s 
argument that use of these items constitutes a sale within the meaning of Missouri law.  
The commission’s decision is affirmed. 
I. 
FACTUAL AND PROCEDURAL BACKGROUND 
The material facts are not in dispute.  Brinker Missouri, Inc., headquartered in 
Dallas, Texas, owns and operates 23 restaurants in Missouri, including Chili’s Grill & 
Bar, Romano’s Macaroni Grill, On the Border and Maggiano’s Little Italy.  Each 
restaurant prepares and sells food and drink to the public2  and is subject to Missouri sales 
and use tax where applicable.   
During the relevant period – October 1, 2003, to December 31, 2004 – Brinker 
purchased what it refers to as “kitchen machinery, equipment and parts” that it used to 
prepare food and drinks for its customers and to refrigerate or heat them pending serving.  
Although the record does not specify the specific nature of this “machinery” or 
“equipment,” it appears to refer to stoves, knives, refrigerators, cutting tables and similar 
items commonly found in kitchens, for the record states that Brinker’s restaurants use 
these items for cutting, cooking, mixing or blending ingredients such as for salsa; baking, 
frying or otherwise cooking raw foods; keeping its salsa and other food and drink 
ingredients chilled or warm during their preparation to prevent spoilage or to hold them 
until there was a need to assemble or mix them into the final food item; and generally 
presenting food and drinks to customers in an attractive way in individual servings. 
                                             
 
2 One of Brinker’s restaurants supplies food to other restaurants also. 
 
3
Also during the period at issue, the restaurants run by Brinker were furnished with 
chairs, bar stools, tables, menus, dishes, tableware, glassware, booster seats, high chairs 
and similar items.  Customers were served meals on the plates, from which they ate while 
sitting at the tables and using the silverware and glasses, as in other restaurants.  The cost 
of these items was included in each restaurant’s overhead.  Brinker charges the same 
prices for meals and drinks for dine-in consumption as for sales “to go.” 
Brinker initially paid use tax for the period October 1, 2003, through December 
31, 2004, but in October 2006, Brinker sought a refund of $54,034.86 of the use tax it had 
paid.  The director denied $48,966.83 of the claim, and Brinker sought review of the 
denial of $44,183.93 of that amount to the commission.  It argued that an exemption 
applied under sections 144.030.2(4) and (5) and section 144.615(6) on the kitchen 
equipment used to make food and prepare it for serving customers as well as on furniture, 
silverware, plates and similar items it used to serve its customers food.  The commission 
denied Brinker’s claim.  Brinker seeks review under MO. CONST. ART. V, § 3. 
II. 
STANDARD OF REVIEW  
 
The commission’s decision shall be affirmed if:  (1) it is authorized by law; (2) it 
is supported by competent and substantial evidence on the whole record; (3) mandatory 
procedural safeguards are not violated; and (4) it is not clearly contrary to the reasonable 
expectations of the General Assembly.  § 621.193.  “This Court reviews the AHC’s 
interpretation of revenue laws de novo.”  Zip Mail Services, Inc. v. Dir. of Revenue, 16 
S.W.3d 588, 590 (Mo. banc 2000).  The commission’s factual determinations “are 
upheld if supported by ‘substantial evidence upon the whole record.’”  Concord Publ’g 
 
4
House, Inc. v. Dir. of Revenue, 916 S.W.2d 186, 189 (Mo. banc 1996), quoting L & R 
Egg Co. v. Dir. of Revenue, 796 S.W.2d 624, 625 (Mo. banc 1990).  
III. 
RESTAURANTS PREPARE RATHER THAN MANUFACTURE MEALS  
  
  Section 144.610.1 imposes a tax “for the privilege of storing, using or consuming 
within this state any article of tangible personal property.”  Brinker admits this taxing 
provision applies to the items as to which it seeks a refund of use tax but argues that it is 
entitled to an exemption from Missouri use tax under sections 144.615(3) and 
144.030.2(4) and (5) for the stoves, refrigerators, dispensers and other items it uses to 
prepare food and drink for its customers.  Brinker bears the burden of showing that it 
qualifies for an exemption.  Branson Props. U.S.A., LP v. Dir. of Revenue, 110 S.W.3d 
824, 825 (Mo. banc 2003).  “Exemptions from taxation are to be strictly construed 
against the taxpayer, and any doubt is resolved in favor of application of the tax.”  Sw. 
Bell Tel. Co. v. Dir. of Revenue, 182 S.W.3d 226, 228 (Mo. banc 2005). 
Section 144.615(3) exempts from use tax “[t]angible personal property, the sale of 
which … would be exempt from or not subject to the Missouri sales tax under the 
provisions of subsection 2 and 3 of section 144.030.”  (emphasis added).   
Brinker argues that it qualifies for the exemptions provided in section 
144.030.2(4) and (5), which it calls the “production exemptions.”  Brinker’s theory is that 
when it cooks and serves food, it in effect is making a product; therefore, its restaurants 
qualify for these “production exemptions.”  It says that the commission erred in holding 
that these exemptions apply only to manufacturers and not to retail sale restaurants, 
which merely engage in preparation of food to be served to restaurant diners.  
 
5
Brinker reads the exemptions too broadly.  Section 144.030.2(5) exempts 
machinery and equipment used to expand or establish manufacturing, mining and 
fabricating plants from sales tax, stating: 
(5)  Machinery and equipment … purchased and used to establish new or 
to expand existing manufacturing, mining or fabricating plants in the 
state if such machinery and equipment is used directly in manufacturing, 
mining, or fabricating a product which is intended to be sold ultimately for 
final use or consumption … 
 
(emphasis added).  While Brinker is correct that this provision does not use the word 
“retail,” it does use the word “plants.”  It expressly states that the machinery and 
equipment must be used for new or expanded plants that manufacture, mine or fabricate 
products intended to be sold ultimately for final use or consumption by others.  Neither 
Chili’s, Macaroni Grill, On the Border nor Maggiano’s Little Italy are plants,3 and they 
do not fabricate, manufacture or mine products to be sold ultimately for final use or 
consumption.  By its terms, this exemption simply does not apply to purchases of new or 
expanded kitchen equipment in Brinker’s restaurants.   The commission did not err in 
rejecting Brinker’s request for a refund of $21,588.19 in use tax it paid on new or 
expanded plant machinery and $1,909.56 in use tax it paid on new or expanded plant 
equipment. 
Brinker also argues some of its kitchen equipment qualifies for an exemption for 
replacement machinery, equipment and parts under section 144.030.2(4), which states: 
                                             
 
3 As relevant here, “plants” are defined as “the land, buildings, machinery, apparatus, and 
fixtures employed in carrying on a trade or a mechanical or other industrial business.”  
WEBSTER’S THIRD NEW INTERNATIONAL DICTIONARY 1731.  The restaurant business 
that Brinker undertakes is not a trade, nor is it a mechanical or other industrial business. 
 
6
(4)  Replacement machinery, equipment, and parts and materials and 
supplies solely required for the installation or construction of such 
replacement machinery, equipment, and parts, used directly in 
manufacturing, mining, fabricating or producing a product which is 
intended to be sold ultimately for final use or consumption … 
 
 While section 144.030.2(4) does not repeat the reference to plants expressly, it 
says it applies to replacement machinery, equipment and parts.  As just noted, machinery, 
equipment and parts qualify for the exemption only if they are used to establish new or 
expanded manufacturing, mining or fabricating plants.  “[W]ords used in proximity to 
one another must be considered together.”  Albanna v. State Bd. of Registration for 
Healing Arts, 293 S.W.3d 423, 431 (Mo. banc 2009).  Moreover, statutory provisions 
are “not read in isolation but [are] construed together, and if reasonably possible, the 
provisions will be harmonized with each other.”  Bachtel v. Miller Cnty. Nursing Home 
Dist., 110 S.W.3d 799, 801 (Mo. banc 2003).  “Exemptions are interpreted to give effect 
to the General Assembly’s intent, using the plain and ordinary meaning of the words.”  
Branson Props. U.S.A., 110 S.W.3d at 825-26.  The legislature did not intend to allow a 
use tax exemption for replacement machinery, equipment or parts that is broader than that 
for the equipment it replaces.   
Brinker argues that this interpretation of the exemption is too narrow and that the 
words “manufacture” and “produce” should be read broadly to include preparing and 
cooking food.  Brinker argues as though all that is required to avail itself of the 
exemption is simply to refer to preparing food as producing it and cooking food as 
manufacturing or transforming it. 
Brinker’s argument ignores the fact that it is seeking to take advantage of an 
 
7
exemption.  “An exemption is allowed only upon clear and unequivocal proof, and doubts 
are resolved against the party claiming it.”  Id. at 825.4  This Court will give the language 
used in the statute a narrow construction, not the exceedingly broad and peculiar meaning 
argued for by Brinker.  Dir. of Revenue v. Armco., Inc., 787 S.W.2d 722, 724 (“Canons 
of construction direct that exemption statutes be strictly construed against the taxpayer”).    
The narrow construction of this exemption also comports with the common sense 
understanding of the words used in the statute.  “Absent a statutory definition, the 
primary rule of statutory interpretation is to give effect to legislative intent as reflected in 
the plain language of the statute.”  Akins v. Dir. of Revenue, 303 S.W.3d 563, 565 (Mo. 
banc 2010).  In lay terminology, one does not speak of a restaurant as manufacturing or 
producing food or drink; instead, restaurants prepare, cook and serve food and drink to 
their customers.  This is how the term “restaurant” is used whenever it appears in 
Missouri’s taxing and tourism statutes.  For example, section 144.010.1(10)(e) defines 
                                             
 
4 This allocation of the burden of proof is rooted in statute.  In Utilicorp United, Inc. v. 
Dir. of Revenue, 75 S.W.3d 725, 727 n.5 (Mo. banc 2001), this Court explained: 
 
Section 136.300.1 states in part: “With respect to any issue relevant to 
ascertaining the tax liability of a taxpayer all laws of the state imposing a 
tax shall be strictly construed against the taxing authority in favor of the 
taxpayer. The director of revenue shall have the burden of proof with 
respect to any factual issue relevant to ascertaining the liability of a 
taxpayer ....” However, section 136.300.2 states in full: “This section shall 
not apply to any issue with respect to the applicability of any tax exemption 
or credit.” Section 621.050.2 states in part: “In any proceeding before the 
administrative hearing commission under this section the burden of proof 
shall be on the taxpayer ....” Thus this Court has concluded that, while it is 
the director's burden to show a tax liability, it is the taxpayer's burden to 
establish the right to an exemption. 
 
 
8
“sale at retail” in relevant part as sales of “meals and drinks furnished” in a place where 
“meals or drinks are regularly served to the public” (emphasis added).5  Section 
67.671.4(1) provides for a tourism tax on the sale of food and beverages “sold for 
consumption on the premises of all restaurants … or other establishments which are 
primarily used to provide food and beverage services” (emphasis added).  Section 
144.014.2 defines the word “food” and in so doing refers to “food prepared by such 
establishment for immediate consumption … including, but not limited to, sales of food 
by any restaurant, fast food restaurant, delicatessen, eating house, or café.”  Section 
66.500(3) defines ‘food establishment’ as any “restaurant which sells food at retail ….”  
Accord § 82.850.1(2), RSMo Supp. 2009; § 92.325(3); § 94.805. 
These definitions have in common that they treat restaurants as furnishing food 
and beverages to the public at retail, not as plants or production facilities that 
manufacture, mine, fabricate or produce food or drink.  Had the legislature intended to 
include restaurants or restaurant equipment within the exemptions set forth in section 
144.030.2, then it would have added the word “restaurant” to those statutes, as it did in 
the various statutes just cited when it wanted to impose or exempt certain establishments 
from various taxes, and just as it provided specific exemptions in other subsections of 
section 144.030 for items or processes ranging from “feed for livestock or poultry” and 
“grain to be converted into foodstuffs which are to be sold ultimately in processed form 
at retail,” § 144.030.2(1), to “materials, replacement parts, and equipment [for] aircraft, 
aircraft power plants, and aircraft accessories.”  § 144.030.2(40) RSMo, Supp. 2009. 
                                             
 
5 See § 144.020.1(6) (tax on “meals and drinks furnished at any ... restaurant ...”).  
 
9
The legislature did not include the words “restaurant” or “preparation” or 
“furnishing” or “serving” in § 144.030.2, nor did it elsewhere indicate that it intended the 
words “manufacturing,” “mining,” “fabricating” or “producing” to be used in a broad 
sense to include preparation and cooking of food for service in a restaurant.  The 
commission did not err in denying Brinker’s request for refunds of $10,181.08, $1,310.54 
and $297.59, respectively, paid in use tax on the replacement machinery, equipment and 
parts it used to prepare and cook food in its restaurants.  
IV. 
 A RESTAURANT DOES NOT SELL A CUSTOMER THE FURNITURE 
ON WHICH SHE SITS OR THE TABLEWARE SHE USES TO EAT  
 
Brinker also seeks a refund of the use taxes it paid on the furniture at which 
customers sit and eat as well as on the items in and on which their food is served, arguing 
that it sells use of these items to its customers, albeit temporarily, and that this either 
exempts or excludes it from paying use tax on these items.  
Section 144.610.1 imposes a use tax “for the privilege of storing, using or 
consuming within this state any article of tangible personal property.”  The definition of 
“use” excludes from the terms of the use tax “the sale of property in the regular course of 
business.” § 144.605(13) (emphasis added); Westwood Country Club v. Dir. of Revenue, 
6 S.W.3d 885, 887 (Mo. banc 1999).  Brinker argues that this exclusion applies to it 
because it sells use of the tables, chairs, plates, glasses, cutlery and other items it uses to 
serve meals to its customers.6   
                                             
 
6 The director argues that this property is subject to the use tax because it is not bought 
for sale and that the issue is whether it is held for resale and so qualifies for an exemption 
to the use tax for tangible personal property otherwise subject to tax but, “held by 
 
10
Section 144.605(7) defines “sale” as “any transfer, barter or exchange of the title 
or ownership of tangible personal property, or the right to use, store or consume the same, 
for a consideration paid or to be paid ….”  As such, for a transaction to constitute a sale 
or resale, three elements must be satisfied:  (1) a transfer, barter, or exchange; (2) of the 
title or ownership of tangible personal property, or the right to use, store, or consume the 
same; (3) for consideration paid or to be paid.  Kansas City Power & Light Co. v. Dir. of 
Revenue, 83 S.W.3d 548, 551 (Mo. banc 2002). 
Brinker’s theory is that as it includes the cost of the tables, chairs, silverware and 
dishes with and on which it serves its customers in its overhead, then each time it serves 
food to its customers, those customers not only are purchasing the food Brinker has 
prepared but also are buying the right to use the furniture on which they sit and the table 
on which the server places their food and the silverware with which they eat.  Brinker 
argues, therefore, that it should be considered to have obtained these service items and 
furniture solely for the purpose of “reselling” them to its customers with their food.   
This argument proves too much.  As every cost normally is included in overhead 
one way or another (at least if the business is to break even), it would mean that 
                                                                                                                                                 
 
processors, retailers, importers, manufacturers, wholesalers, or jobbers solely for resale 
in the regular course of business.” § 144.615.6 (emphasis added). The practical 
consequence of whether to consider the claim under one or the other statute is its effect 
on the burden of proof; the burden is on the director to prove that a sale is included rather 
than excluded from tax, Utilicorp, 75 S.W.3d at 727 n.5, but if it is included, then the 
burden is on the taxpayer to show that an exemption to an otherwise applicable tax 
applies, see Branson Props. U.S.A., 110 S.W.3d at 825.  For purposes of this case, 
however, this Court need not determine under which provision the use of these items to 
serve and provide food to restaurant customers would fall because either would require 
Brinker to transfer its furniture, tableware or other items to its customers, which it does 
not do.  
 
11
everything a customer touches in the restaurant in that sense is resold and not subject to 
use tax.  That cannot be what the legislature intended when it enacted these statutes.  A 
“transfer, barter, or exchange” of “the title or ownership of tangible personal property, or 
the right to use, store, or consume the same” does not occur when Brinker provides the 
benches, chairs, bar stools, tables, menus, dishes, tableware, glassware, booster seats and 
high chairs to supply meals to its customers conveniently.  While Brinker customers do 
acquire temporary use in the sense that the reusable items are used as a mechanism to 
facilitate delivery of their food and drink, this degree of control is de minimus and does 
not rise to the level of an actual transfer of a right to use.   The plates, tables and chairs 
are not in any real sense transferred to customers any more than a piece of the restaurant 
floor is transferred to a customer when he or she walks on it or a bottle of ketchup is 
transferred when a customer picks it up to use or inspect it or a menu is transferred to a 
customer who reads it. 
The cases cited by Brinker to support a contrary position are inapposite.  Those 
cases finding a sale when the cost was included in overhead did so because, in fact, title 
was passed from the taxpayer to a third party in exchange for a purchase, and, therefore, a 
permanent transfer had occurred.  See, e.g., Kansas City Royals Baseball Corp. v. Dir. of 
Revenue, 32 S.W.3d 560, 561 (Mo. banc 2000) (with purchase of admission tickets, fans 
received outright title to promotional baseball caps, trading cards, baseball gloves, batting 
gloves and T-shirts); Aladdin’s Castle, Inc. v. Dir. of Revenue, 916 S.W.2d 196, 197 
(Mo. banc 1996) (in exchange for tickets supplied by arcade games, customers could 
obtain outright title to arcade prizes); Sipco, Inc. v. Dir. of Revenue, 875 S.W.2d 539, 
 
12
542 (Mo. banc 1994) (customers received outright title to the dry ice packaged in pork 
shipments and used to preserve the pork); King v. Nat’l Super Mkts., Inc., 653 S.W.2d 
220, 222 (Mo. banc 1983) (customers received outright title to paper sacks the grocery 
store used to bag groceries).  
In those few cases finding a sale took place absent a permanent transfer of 
possession and title, the taxpayer did not merely incorporate the cost of the items in 
overhead, as Brinker has done here, but charged an additional consideration for the right 
to use the item for an extended period.  For example, in Ronnoco Coffee Co., Inc v. Dir. 
of Revenue, 185 S.W.3d 676, 677 (Mo. banc 2006), the taxpayer sought a section 
144.615(6) resale exemption for the use tax paid on certain coffee equipment.  A grocery 
store could choose to buy the coffee equipment and pay one price for coffee beans it 
purchased from Ronnoco, or it could choose not to buy the coffee equipment but be 
permitted to use it so long as the store paid a higher price for coffee beans as well as a $1 
loan fee for use of the equipment, subject to Ronnoco’s right to remove its equipment at 
any time.  This Court held that Ronnoco’s charge of separate consideration for the “loan 
agreement” of the equipment constituted a transfer for consideration.  Id. at 677-79. 
Similarly, in Weather Guard, Inc. v. Dir. of Revenue, 746 S.W.2d 657, 657-58 
(Mo. App. 1988), the court of appeals held that insulation machines temporarily provided 
to customers pursuant to a “Rental Machine Agreement” constituted a transfer of a right 
to use the machines for consideration because an additional amount was charged for 
insulation purchased by those customers as compared with the price charged to customers 
who either bought the machines outright or used their own machines.   
Here, the chairs, tables, dishes, tableware and similar items are used to serve or 
supply the food conveniently to Brinker’s customers and allow them to have a place at 
which to sit to eat it.  No additional charge is made to customers for the privilege of 
sitting in a chair, eating at a table, or using glasses or silverware.  Customers are not 
charged different sums depending on how many of these serving items they use or at 
what kind of chair or table they sit, and “to go” customers are charged the same price for 
food as are eat-in customers.  To charge a separate fee certainly would be detrimental to 
the Brinker’s business because customers come to Brinker’s restaurants to eat the food, 
not to rent use of bowls, cups and tables; the items as to which a use tax exclusion or 
exemption is sought are used simply as a delivery mechanism for what customers are 
buying – the food and beverages.  Brinker fails to show, within the meaning of the 
statutes, a transfer of a right to use the furniture, menus, dishes, glassware, booster seats, 
high chairs and other items it provided at its restaurants for consideration.  It cannot avail 
itself of an exemption under section 144.615(6) or an exclusion under section 
144.605(13).    
IV. 
 
CONCLUSION 
For the foregoing reasons, the decision of the commission is affirmed. 
 
 
 
 
 
 
 
 
_______________________________  
 
 
 
 
 
 
 
     LAURA DENVIR STITH, JUDGE 
 
Teitelman, Russell, Wolff, Breckenridge, and 
Fischer, JJ., concur; Price, C.J., dissents in  
separate opinion filed. 
 
 
SUPREME COURT OF MISSOURI 
en banc 
 
 
BRINKER MISSOURI, INC.,  
) 
 
 
 
 
 
 
) 
 
Appellant, 
 
 
 
) 
 
 
 
 
 
 
) 
vs. 
 
 
 
 
 
) 
No. SC90463 
 
 
 
 
 
 
) 
DIRECTOR OF REVENUE, 
 
) 
 
 
 
 
 
 
 
) 
 
Respondent.  
 
 
) 
 
DISSENTING OPINION 
 
The majority holds that Brinker is not entitled to tax exemptions under 
sections 144.030.2(4) and (5), RSMO 2000, because restaurants are not “plants” 
and because Brinker does not manufacture a product.  I respectfully disagree with 
the majority on both points. 
I. 
Restaurants Are Plants. 
 
Section 144.030.2(4) allows tax exemptions for replacement equipment 
“used directly in manufacturing, mining, fabricating or producing a product which 
is intended to be sold ultimately for final use or consumption.”  § 144.030.2(4).  
Section 144.030.2(5) allows tax exemptions for: 
Machinery and equipment . . . purchased and used to establish new or to 
expand existing manufacturing, mining or fabricating plants in the state if 
such machinery and equipment is used directly in manufacturing, mining, 
or fabricating a product which is intended to be sold ultimately for final use 
or consumption. 
 
§ 144.030.2(5) (emphasis added). 
 
Because “plants” are not defined in the statute, the majority properly turns 
to the dictionary, which defines a plant as “the land, buildings, machinery, 
apparatus, and fixtures employed in carrying on a trade or a mechanical or other 
industrial business.”  WEBSTER’S THIRD NEW INTERNATIONAL DICTIONARY 1731 
(emphasis added).  The majority fails, however, to finish the process by examining 
the definition of “trade.”  The dictionary defines a trade as “an occupation 
requiring manual or mechanical skill and training.”  Id. at 2421.  Cooking and 
preparing food is a trade that requires manual skill and training.  Brinker’s 
restaurants are “land, buildings, machinery, apparatus, and fixtures employed in 
carrying on a trade” and fit within the language of sections 144.030.2(4) and (5) 
according to the dictionary definitions used by the majority. 
Prior decisions of this Court repeatedly have allowed a broad interpretation 
of manufacturing plants and processes for purposes of this exemption.   
Southwestern Bell Tele. Co. v. Dir. of Revenue, 78 S.W.3d 763 (Mo. banc 2002) 
(telephone company performing telecommunications services); DST Sys., Inc. v. 
Dir. of Revenue, 43 S.W.3d 799 (Mo. banc 2001) (newspaper publishing); Bridge 
Data Co.  v. Dir. of Revenue, 958 S.W.2d 204 (Mo. banc 1990) (financial 
company that supplied information about securities traded on public markets), 
 
2
abrogated on other grounds by International Bus. Mach. Corp. v. Dir. of Revenue, 
958 S.W.2d 554 (Mo. banc 1997). 
II. 
Cooking Is Manufacturing Under the Statute. 
 
The process of preparing food for consumption by Brinker’s patrons is 
manufacturing.   Manufacturing is “the alteration or physical change of an object 
or material in such a way that produces an article with a use, identity, and value 
different from the use, identity, and value of the original.”  Branson Prop. USA, 
L.P. v. Dir. of Revenue, 110 S.W.3d 824, 826 (Mo. banc 2003).  Acts that fall 
outside subdivisions (4) and (5) generally involve repairing or transmitting 
products rather than creating output that has a distinct use, identity or value.  See 
Utilicorp United v. Dir. of Revenue, 75 S.W.3d 725, 729 (Mo. banc 2001) 
(transmitting or distributing electricity); Unitog Rental Services v. Dir. of Revenue, 
779 S.W.2d 568, 570-71 (Mo. banc 1989) (cleaning and repairing uniforms); State 
ex rel. AMF Inc. v. Spradling, 518 S.W.2d 58, 61-62 (Mo. 1974) (retreading or 
recapping tires). 
Again, this Court repeatedly has allowed a broad interpretation of what 
output is sufficient to be considered manufacturing.   See Concord Publ’g House, 
Inc. v. Dir. of Revenue, 916 S.W.2d 186, 191 (Mo. banc 1996) (manipulating and 
affixing words onto a page to create a newspaper); Jackson Excavating v. 
Administrative Hearing Comm’n, 646 S.W.2d 46, 51 (Mo. 1983) (treating and 
purifying water); Wilson & Co., Inc. v. Department of Revenue, 531 S.W.2d 752, 
755 (Mo. 1976).   
 
3
In Wilson, this Court held that converting live hogs into marketable 
portions of food fit for human consumption was manufacturing.  Id.  Like in 
Wilson, Brinker’s restaurants also take raw ingredients and transform them into 
articles ready for human consumption.  The resulting food is distinct from the 
original ingredients, and the finished product is generally twice as valuable as the 
original ingredients.  For the purposes of section 144.030.2, there can be no valid 
distinction between a facility that prepares food for wholesale consumption and 
one that prepares food for retail consumption. 
The legislature enacted sections 144.030.2(4) and (5) to “encourage the 
production of items ultimately subject to sales tax and to encourage the location 
and expansion of industry in Missouri.”  Concord Publ’g House, 916 S.W.2d at 
190.  By applying an unduly narrow construction to this exemption, the majority 
frustrates the legislative intent of creating jobs and nurturing small business in 
Missouri. 
For the foregoing reasons, I respectfully dissent. 
 
___________________________________ 
 
 
 
 
 
William Ray Price, Jr., CHIEF JUSTICE 
 
4