Title: Crescent Plumbing Supply Company v. Director of Revenue

State: missouri

Issuer: Missouri Supreme Court

Document:

SUPREME COURT OF MISSOURI
en banc 
CRESCENT PLUMBING SUPPLY 
) 
COMPANY, 
 
) 
) 
Appellant, 
) 
) 
v. 
) 
No. SC97091 
) 
DIRECTOR OF REVENUE, 
) 
) 
Respondent. 
) 
Petition for Review of a Decision of the  
Administrative Hearing Commission 
The Honorable Brett W. Berri, Commissioner 
Crescent Plumbing Supply Company petitions for review of the decision of the 
Administrative Hearing Commission (“AHC”) holding its claim for refund of sales tax 
untimely under section 144.190.2.1  That section provides a three-year window from the 
date of overpayment to seek a refund.  Crescent admits it filed its refund request more 
than three years after remitting the sales tax but argues the refund request was timely 
because 12 C.S.R. 10-102.016(2)(A) provides a refund claim should also be considered 
1 All statutory references are to RSMo Supp. 2012 unless otherwise indicated, except 
section 144.080, RSMo 2000. 
Opinion issued December 18, 2018
 
2 
timely if filed within three years of the date the tax return was due.  Crescent claims it 
filed the refund request within three years of the latter date.  
 
This Court affirms without reaching the issue of whether 12 C.S.R. 10-
102.016(2)(A) is valid and consistent with section 144.190.2 because, even were it 
applicable, Crescent is incorrect about when its return was due.  The return for each sale 
was due on the return filing date following that sale and could not be delayed until after it 
completed all transactions with that customer.  The refund claim, therefore, is untimely 
because it was filed more than three years after the return was due and more than three 
years after the date Crescent paid the tax. 
I. 
PROCEDURAL AND FACTUAL BACKGROUND  
 
Crescent is a plumbing supply company located in Missouri.  Crescent sold two 
water heating systems to the Murphy Company, also located in Missouri.  The water 
heating systems were manufactured in Illinois and shipped directly to a Florida customer 
of Murphy on December 27, 2012.  Crescent generated a $120,361.06 invoice for the 
transaction on that date, which it sent to Murphy at the time it shipped the two water 
heating systems.  Crescent’s invoice also charged an additional $10,219.86 for Missouri 
sales tax, which Murphy paid with the remainder of the amount due.  
On February 4, 2013, Crescent sold three additional components to Murphy and 
shipped the components to the Florida customer for use with the water heating systems.  
Crescent’s invoice for $11,376.55 included a $965.68 charge for Missouri sales tax.  
Murphy paid Crescent’s invoice, including the Missouri sales tax, shortly thereafter.    
Under section 144.080.1, sales tax returns for the quarterly period ending March 
 
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31, 2013, were due by the end of April 2013.  On April 26, 2013, Crescent filed a 
Missouri sales tax return and remitted $11,186.46 in Missouri sales tax collected as part 
of its December 2012 and its February 2013 sales to Murphy of water heaters and 
components.    
 In June 2013, Crescent sold and shipped one additional component for the water 
heating systems with an invoice dated June 28, 2013, for $368.95, including $30.71 of 
Missouri sales tax.  Crescent remitted this sales tax on December 20, 2013, when it filed 
its November 2013 Missouri sales tax return.2 
In 2016, Florida tax authorities told Murphy, because the water heating systems 
and components were sent to and used in Florida, sales tax should have been paid to 
Florida, not Missouri, on the sales, and Murphy then informed Crescent.  Crescent paid 
the necessary tax to Florida and thereafter on May 11, 2016, requested a refund of the 
overpayment it had made when it remitted Missouri sales tax on these Florida sales.   
The director agreed that, if the claims for refund were timely, Crescent would be 
entitled to a refund of the sales tax remitted on the three sales.  But the director found 
only the final sale was within the three-year period for seeking refunds set by section 
                                              
2 The date the invoice was paid affected when Crescent should have filed its returns.  The 
proper due date for a sales tax return depends on a number of factors, including the 
aggregate amount of sales tax levied and imposed in a month, the position of that month 
in the calendar quarter, the history of sales tax levied and imposed for the prior year, and 
the discretion of the director of revenue.  See §§ 144.080; 144.081; 144.090; 144.100.  
While the record does not reveal the specific dates when each invoice was paid, at the 
time of remittance both Crescent and the Director treated April 30, 2013, as the 
applicable due date for the first two sales and December 20, 2013, as the applicable due 
date for the third sale.  Neither denies these were the correct dates if the sales are treated 
as three separate sales at retail.  See § 144.080. 
 
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144.190.2, which provides in relevant part that no “refund shall be allowed unless 
duplicate copies of a claim for refund are filed within three years from date of 
overpayment.”   
Accordingly, the director refunded the $30.71 in Missouri sales tax Crescent had 
paid December 20, 2013, and the propriety of that refund is not before this Court.  But the 
director denied the claim for refund of the $11,186.46 paid April 26, 2013, for the sales in 
December 2012 and February 2013, as the refund claim was filed more than three years 
after the April 26, 2013 payment.   
Crescent appealed the Director’s denial of a refund of the amount paid on April 
26, 2013, to the AHC, which affirmed.  Crescent filed a petition for review in this Court.  
This Court has exclusive appellate jurisdiction because this case involves the construction 
of a state revenue law.  Mo. Const. art. V, § 3; Circuit City Stores, Inc. v. Dir. of 
Revenue, 438 S.W.3d 397, 399 (Mo. banc 2014). 
II. 
STANDARD OF REVIEW  
 
This Court reviews the AHC’s interpretation of revenue statutes de novo.  Union 
Elec. Co. v. Dir. of Revenue, 425 S.W.3d 118, 121 (Mo. banc 2014); Circuit City, 438 
S.W.3d at 399.   
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. 
 
Union Elec., 425 S.W.3d at 121; Mo. Const. art. V, § 18.  
 
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III. 
CRESCENT’S REFUND REQUEST WAS UNTIMELY  
Section 144.020.1(1) levies a tax upon “every retail sale in this state of tangible 
personal property.”  The term “sale at retail” is defined as: 
any transfer made by any person engaged in business as defined herein of 
the ownership of, or title to, tangible personal property to the purchaser, for 
use or consumption and not for resale in any form as tangible personal 
property, for a valuable consideration. 
 
§ 144.010.1(11).  Under this statutory definition, a sale at retail occurred each time 
Crescent transferred tangible personal property not for resale for a valuable consideration.   
The record shows three distinct instances in which Crescent transferred tangible 
personal property:  December 27, 2012; February 4, 2013; and June 2013.  On the first 
occasion, Crescent shipped two water heating systems to Murphy’s customer in Florida, 
and on the second and third occasions it shipped the customer components for those 
heaters.  Crescent sent its invoice after each sale for the amount due for that particular 
sale, including for Missouri sales tax, and was paid the invoiced Missouri sales tax along 
with its other charges.   
Crescent remitted the sales tax it had collected for the first two sales on April 26, 
2013, pursuant to section 144.080.1.3  April 26, 2013, therefore, is the date Crescent paid 
the sales tax for these sales which it and the director now agree should not have been 
                                              
3 Section 144.080.1 provides:  
Every person receiving any payment or consideration upon the sale of 
property … shall, on or before the last day of the month following each 
calendar quarterly period of three months, file a return with the director of 
revenue showing the person’s gross receipts and the amount of tax levied in 
section 144.020 for the preceding quarter, and shall remit to the director of 
revenue, with the return, the taxes levied in section 144.020 …. 
 
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paid.  Section 144.190.2 provides:  
If any tax, penalty or interest has been paid more than once, or has been 
erroneously or illegally collected … the balance, … shall be refunded to the 
person legally obligated to remit the tax, but no such credit or refund shall 
be allowed unless duplicate copies of a claim for refund are filed within 
three years from date of overpayment. 
 
(Emphasis added). 
The determinative issue is the meaning of “date of overpayment” as used in 
section 144.190.2.  The director contends the plain meaning of “date of overpayment” is 
the date Crescent remitted the Missouri sales tax it now says it should not have paid.  In 
support, the director cites Ford Motor Co. v. Dir. of Revenue, 97 S.W.3d 458, 462 (Mo. 
banc 2003), which holds “date of overpayment” means “when the taxpayer remits 
payment of tax on the transactions that generate the issue of overpayment.”  
Crescent’s contrary argument is more complex.  It concedes the refund claim came 
more than three years after April 26, 2013, the date on which it actually overpaid the 
sales tax it now says it should not have had to pay.  But Crescent argues it need not have 
filed its return for the first two transactions on April 26, 2013.  Rather, it contends, it 
could have waited to file its return and remit all the sales tax on December 20, 2013, the 
date on which it filed its return and paid the sales tax for the June 2013 sale.  Crescent 
argues the director should treat all three transactions as portions of a single sale rather 
than as three separate sales as the sales were all made pursuant to a single contract 
between Murphy and Crescent for two water heating systems.  Only when the final 
component was sent should that sale be considered complete, Crescent argues. 
 
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It is significant whether the sales are treated as a single sale only because 12 
C.S.R. 10-102.016(2)(A) provides the “date of the overpayment is the due date of the 
original return or the date paid whichever is later” (emphasis added).  According to 
Crescent, therefore, under the regulation, if all three sales are treated as a single sale for 
which the due date was December 2013, then the sales tax refund claim would be timely 
for all the sales tax.  This is so, it claims, even though the actual date of payment, April 
26, 2013, was more than three years prior to the filing of the refund request, because the 
due date would be later than the date the sales tax actually was remitted.  Crescent 
distinguishes Ford Motor on the basis it did not address the then recently promulgated 
regulation, 12 C.S.R. 10-102.016(2)(A). 
The normal meaning of “overpayment” is “payment in excess of what is due: the 
amount of such excess.”  Webster’s 3rd New International Dictionary 1609 (2002).  The 
plain meaning of “date of overpayment” then, would be the date on which the taxpayer 
made a payment in excess of what is due.  Section 144.190.2 refers only to “date of 
overpayment,” not the date the return might have been due, and nothing in the statute 
provides the term “overpayment” is used in any way other than its usual sense.  It is well-
settled “regulations may be promulgated only to the extent of and within the delegated 
authority of the statute involved.”  Hearst Corp. v. Dir. of Revenue 779 S.W.2d 557, 558-
59 (Mo. banc 1989).  “If a regulation is inconsistent with the statute, it is the statute, not 
the regulation, that this Court will apply.”  Union Elec., 425 S.W.3d at 125.  Even if 
valid, however, the regulation is applicable only if Crescent is correct that its three 
transactions constitute a single retail sale for sales tax purposes.  And, in fact, they do not. 
 
8 
In support of its position that the three sales should be treated as a single sale, 
Crescent relies on the definition of “sale” under the Missouri Uniform Commercial Code 
(“UCC”), which provides in section 400.2-106, RSMo 2000: “A ‘sale’ consists in the 
passing of title from the seller to the buyer for a price.”  Crescent says title did not pass 
until the Florida customer had the last piece necessary for the water heating systems to 
work, which it says was in June 2013.  Crescent also relies on UCC section 400.1-
103(a)(2), RSMo 2000, which provides: “This chapter shall be liberally construed and 
applied to promote its underlying purposes, which are … to permit the continued 
expansion of commercial practices through custom, usage, and agreement of the parties.”  
Crescent says its custom, usage, and agreement in its dealing with Murphy all show these 
three transactions were part of the single contract for sale of two water heating systems. 
The issue here, however, is not the UCC’s definition of “sale” or whether the 
parties entered into a single contract for the purchase of two water heating systems.  “The 
legislature’s own construction of its language by means of definition of the terms 
employed should be followed in the interpretation of the statute to which it relates and is 
intended to apply and supersedes the commonly accepted dictionary or judicial definition 
and is binding on the courts.”  State v. Hermanns, 641 S.W.2d 768, 769 (Mo. banc 1982).  
In other words, the definition of “sale at retail” in Missouri’s tax code is what governs 
here.  Under section 144.010.1(11), a sale occurred each of the three times Crescent 
transferred tangible personal property for a valuable consideration.   
 
9 
Because three separate sales at retail occurred as defined under Missouri sales tax 
law, Crescent was required to file its return and remit the sales tax it had collected on the 
first two sales with its March 2013 return, which was due by April 30, 2013.  It filed that 
return on April 26, 2013, and remitted the sales tax on those two sales with that return.  
As this was more than three years prior to the filing of Crescent’s May 11, 2016, claim 
for refund, the claim for refund was untimely for those remittances.   
IV. 
CONCLUSION  
 
For the reasons stated above, the decision of the AHC is affirmed. 
  
 
   
 
 
 
 
 
 
 
_________________________________  
 
 
 
 
 
 
 
     LAURA DENVIR STITH, JUDGE 
 
All concur.