Title: St. Louis Rams LLC v. Director of Revenue

State: missouri

Issuer: Missouri Supreme Court

Document:

SUPREME COURT OF MISSOURI 
en banc
THE ST. LOUIS RAMS LLC, f/k/a 
) 
THE ST. LOUIS RAMS PARTNERSHIP, 
) 
) 
Respondent, 
) 
) 
v. 
) 
No. SC95910 
) 
DIRECTOR OF REVENUE, 
) 
) 
Appellant. 
) 
PETITION FOR REVIEW OF A DECISION OF THE 
ADMINSTRATIVE HEARING COMMISSION 
The Honorable Sreenivasa Rao Dandamudi, Commissioner 
The Administrative Hearing Commission (hereinafter, “Commission”) determined 
The St. Louis Rams LLC f/k/a The St. Louis Rams Partnership (hereinafter, “the Rams”) 
were entitled to a refund of state sales tax paid, plus statutory interest, for the period from 
February 1, 2007, through January 31, 2010.  The Commission also determined the Rams 
were not liable for state sales tax and interest assessed by the director of revenue 
(hereinafter, “the director”) for periods from February 1, 2010, through January 31, 2013. 
The director seeks judicial review of the Commission’s decision.  This Court has 
jurisdiction pursuant to article V, section 3 of the Missouri Constitution.  The 
Commission’s decision is reversed, and the cause is remanded. 
Opinion issued August 1, 2017
2 
 
Factual and Procedural History 
 
 
The Rams sold tickets for the exhibition of National League Football games played 
in the City of St. Louis (hereinafter, “the city”).  Pursuant to ordinance No. 65669, 
ordinance No. 68380, and the city’s revised code chapter 8.08, the city imposed upon the 
Rams an “entertainment license tax” (hereinafter, “the ELT”).  The ELT provides:   
Any person or persons, partnership of whatever form, or corporation in the 
business of admitting persons or groups upon payment of an admission 
charge to a … sporting event, including but not limited to … football … are 
taxed upon the amount of gross receipts derived from such admission charges 
at the rate of five percent …. 
 
Chapter 8.08.010.  Chapter 8.08.060 requires those subject to the ELT to apply for a “gross 
receipts license” prior to commencing business.  Upon payment of the ELT, the city “shall 
issue the license as hereinafter provided ….”  Chapter 8.08.020.  The Rams chose to pass 
their obligation to pay the ELT through to ticket purchasers who sought admission to 
football games played in the city.  When the Rams collected and remitted the ELT to the 
city, the city issued the Rams a gross receipt license to operate their business in the city.   
 
From February 1, 2007, through January 31, 2013, the Rams collected and remitted 
the ELT to the city.  The Rams included the ELT they collected as part of their gross 
receipts in their sales tax returns filed with the director for the period of February 1, 2007, 
through January 31, 2010.  In April 2011, the Rams applied for a refund of state sales tax 
paid equal to the ELT they included in their gross receipts, alleging the ELT was included 
erroneously.  The director denied the Rams’ application.  In December 2011, the Rams 
petitioned for a refund and requested an evidentiary hearing before the Commission.   
3 
 
 
The Rams did not include the ELT they collected in their gross receipts when 
calculating state sales tax for the period of February 1, 2010, through January 31, 2013.   
The director audited the Rams, determined the Rams failed to collect or remit sales tax on 
five percent of the ticket sales, and found the Rams owed state sales tax.  In August 2013, 
the Rams filed a petition challenging the assessment and requested an evidentiary hearing 
before the Commission.  The Rams asserted similar legal arguments and defenses for their 
December 2011 refund petition in this action.  The parties filed a joint motion to consolidate 
the cases, which the Commission sustained. 
 
 
The parties filed two joint stipulations.  The first stipulation stated the Rams 
remitted state and local sales tax, as well as the ELT, on the amounts charged for admission 
from February 1, 2007, through January 31, 2013.  The second stipulation contained an 
authentic copy of the city’s ordinance governing the ELT.   
 
The parties filed competing motions for summary decision.  The Commission issued 
a decision in the Rams’ favor.  The Commission stated the issue to be resolved was whether 
the ELT was included in “the amount paid” as stated in section 144.020.1(2).1 The 
Commission found the ELT was an occupational tax because it required the Rams to obtain 
a license to conduct the business of charging admission to professional football games and, 
as a condition of maintaining the license, to pay a portion of their gross receipts to the city 
through the ELT.  The Commission determined the taxing statute was ambiguous and 
construed it against the director, finding, in both cases, the director attempted to impose a 
                                                 
1 All statutory references are to RSMo Supp. 2013. 
4 
 
tax upon a tax.  The Commission ordered the director to issue a refund to the Rams for the 
ELT erroneously included in the February 2007 through January 2010 periods.  The 
Commission also found the Rams were not liable for sales tax based on the ELT collected 
and remitted from February 2010 through January 2013.  The director seeks judicial review 
of the Commission’s decision.   
Standard of Review 
 
This Court will affirm the Commission’s decision when it is “authorized by law and 
supported by competent and substantial evidence upon the record as a whole unless clearly 
contrary to the reasonable expectations of the General Assembly.”  Krispy Kreme 
Doughnut Corp. v. Dir. of Revenue, 488 S.W.3d 62, 67 (Mo. banc 2016) (quoting 801 
Skinker Blvd. Corp. v. Dir. of Revenue, 395 S.W.3d 1, 3-4 (Mo. banc 2013) (internal 
quotation omitted)); see also section 621.193.  This Court reviews the Commission’s 
interpretation of a revenue statute de novo.  IBM Corp. v. Dir. of Revenue, 491 S.W.3d 535, 
538 (Mo. banc 2016).   
Analysis 
 
The director argues the Commission erred in finding the portion of the ticket sales 
the Rams used to pay the ELT was not subject to sales tax.  The director contends the ELT 
was included in the amount ticket purchasers paid for admission via the fixed ticket price 
charged by the Rams.   
“This Court’s primary rule of statutory interpretation is to give effect to legislative 
intent as reflected in the plain language of the statute at issue.”  Krispy Kreme Doughnut 
Corp., 488 S.W.3d at 70 (quoting Parktown Imports, Inc. v. Audi of Am., Inc., 278 S.W.3d 
5 
 
670, 672 (Mo. banc 2009)).  This Court interprets statutes in a way that is not hyper-
technical but, instead, is reasonable, logical, and gives meaning to the statute and the 
legislature’s intent as reflected in the statute’s plain language.  Fred Weber Inc. v. Dir. of 
Revenue, 452 S.W.3d 628, 630 (Mo. banc 2015).   
 
Missouri sales tax is a gross receipts tax imposed upon the seller.  Cent. Hardware 
Co., Inc. v. Dir. of Revenue, 887 S.W.2d 593, 594 (Mo. banc 1994).  Section 144.010.1(4) 
defines “gross receipts” as “the total amount of the sale price of the sales at retail.”  This 
section further provides, for the purposes of the sales tax law, “the total amount of the sale 
price above mentioned shall be deemed to be the amount received.”  Section 
144.010.1(11)(a) provides “sales at retail … shall be construed to embrace [s]ales of 
admission tickets, cash admissions, charges and fees to … games and athletic events.”   
Section 144.020.1(2) provides for sales tax to be imposed “on the amount paid for 
admission and seating accommodations, or fees paid to … games and athletic events.”  See 
also Eighty Hundred Clayton Corp. v. Dir. of Revenue, 111 S.W.3d 409, 410 (Mo. banc 
2003).  Section 144.010.1(1) defines “admission” to include “seats and tables, reserved or 
otherwise, and other similar accommodations and charges made therefor and amount paid 
for admission, exclusive of any admission tax imposed by the federal government or by 
[the sales tax law].”   
The director’s argument relies on the presumption the ELT was included in the price 
of admission paid by ticket purchasers.  The Rams disagree, pointing to a statement in the 
first joint stipulation, which the Commission adopted as a finding of fact.  The first joint 
stipulation stated the Rams remitted state and local sales tax, as well as amounts due for 
6 
 
the ELT, on amounts charged for admission.  The Rams believe this statement 
demonstrates the ELT collected and remitted “necessarily was not paid to the Rams for 
admission.”   
This Court disagrees with the Rams’ interpretation of the stipulation and the 
Commission’s reliance upon that interpretation.  No language in the stipulation or the 
Commission’s finding resolves whether the ELT was included in the price of admission or 
whether it constituted a separate charge, especially when there is no dispute the Rams 
passed their obligation to pay the ELT through to ticket purchasers.  Ticket purchasers paid 
a fixed dollar amount to gain admission to football games.  Had the ticket purchasers 
declined to pay the fixed price the Rams charged – in effect declining to pay the ELT – it 
stands to reason the Rams would not have issued tickets to those purchasers or allowed 
them to be admitted into the football game, despite their assertion the ELT was not 
necessarily paid for admission.  Hence, the Rams structured the collection of the ELT in 
such a way that it was included in “the amount paid for admission” as contemplated under 
section 144.020.1(2). 
 The director also maintains the statutory definition of “admission” does not exclude 
the ELT.  The definition of “admission” expressly excludes “any admission tax imposed 
by the federal government or by [the sales tax law].”  Section 144.010.1(1).  The director 
argues the ELT does not fall within either of these express exclusions in that the ELT is 
not an admission tax imposed by the federal government and it is not a sales tax.  A plain 
reading of the statute supports the director’s position.  However, the Rams counter that 
taxes collected by a seller in connection with a taxable sale are not subject to sales tax.  
7 
 
Likewise, the Rams claim the exclusion listed in the definition of “admission” should be 
read as illustrative examples, and includes taxes not listed expressly, such as the ELT.  The 
Rams cite Moore Leasing, Inc. v. Director of Revenue, 869 S.W.2d 760 (Mo. banc 1994), 
to support these propositions.2   
In Moore Leasing, the director assessed sales tax on personal property tax payments 
made by a motor vehicle leasing company’s customers.  The lease agreement entered into 
between the leasing company and its customers provided lessees make monthly rental or 
lease payments and lessees were billed for personal property tax annually.  The leasing 
company paid sales tax on the lessees’ monthly payments.  The leasing company forwarded 
personal property tax assessments on the leased vehicles to the lessees for payment.  The 
lessees were given the option to pay the personal property tax directly to the collector of 
revenue or pay the leasing company, which would then forward the personal property tax 
to the collector of revenue.  Id. at 760-61.  When the leasing company forwarded payments 
on behalf of its lessees to the collector of revenue, the director assessed sales tax on those 
payments.  Id. at 761.   
This Court held the director was not authorized to assess sales tax on the lessees’ 
personal property tax payments routed through the leasing company because it effectively 
amounted to a tax on a tax.  This Court explained section 144.070, RSMo 1986 specifically 
governed sales tax liability for motor vehicle leasing companies; thus, analyzing only the 
general gross receipts provision of section 144.010 did not resolve the issue.  Id.  This 
                                                 
2 The Rams also cite 12 C.S.R. 10-103.800(2)(E), which states, “Amounts charged to and 
received from purchasers as tax are not included in gross receipts.” 
8 
 
Court found section 144.070.5 was ambiguous and construed the statute against the taxing 
authority.   Id. 
Here, the Commission determined Moore was not controlling authority because 
different taxing statutes were at issue.3  This Court agrees.  Moore’s construction of section 
144.070, governing the sales tax implications of purchasing or leasing a motor vehicle, 
does not speak to the specific issue of sales tax due on admissions governed by section 
144.020.1(2).  Moreover, the monthly leasing payments in Moore were separate and 
distinct from the personal property tax payment, thus distinguishing it from the case at bar, 
in which the Rams passed the ELT through to ticket purchasers who paid a fixed price for 
admission.  Finally, in Moore, the lessee was obligated to pay the personal property tax, 
not the leasing company.  The Rams are obligated to pay the ELT as a cost of doing 
business; there is no requirement a ticket purchaser incur that cost. 
Relatedly, the Rams contend only the amount ticket purchasers paid for “admission” 
is taxable and, although the Rams passed through and collected the ELT from ticket 
purchasers via a fixed-price ticket, the ELT should be excluded from the sales tax base.  
                                                 
3 The Commission later declared section 144.020.1(4) ambiguous, relying on a footnote in 
Moore comparing language from section 144.070, applying to motor vehicle leasing 
companies, and section 144.010.1(4), defining gross receipts.  Moore, 869 S.W.2d at 761, 
n.2.  This Court presumes the Commission’s citation to section 144.020.1(4) is a 
typographical error in that section 144.020.1(4) concerns the sales tax calculation for 
telecommunication services and equipment, which is not at issue in this case.  It is unclear 
whether the Commission intended to cite section 144.010.1(4), defining gross receipts, as 
the director speculates, or section 144.020.1(2), governing sales tax on admission, as the 
Rams assert.  Given this Court’s resolution of the case, we need not resolve this discrepancy 
or speculate about the Commission’s interpretation.  It is worth noting neither party 
contends now that any of the statutes at issue are ambiguous.   
 
9 
 
The Rams rely on ITT Canteen Corporation v. Spradling, 526 S.W.2d 11 (Mo. 1975), for 
the proposition the entire amount collected by a seller is not deemed always to be the 
taxable amount includable in the sales tax base.  The Rams’ reliance on this case is 
misplaced. 
In ITT Canteen, a cigarette seller challenged a ruling requiring it to include the 
payment of the nine-cent-per-pack Missouri cigarette tax in its state sales tax base.  ITT 
Canteen, 526 S.W.2d at 13.  The cigarette tax statute provided “that the impact of the tax 
levied hereunder be absorbed by the consumer or user ….”  Id. at 15.  The cigarette tax 
statute further provided the tax “shall thereafter be added to the price of the cigarettes and 
recovered from the ultimate consumer or user with [the seller] acting as an agent of the 
state for the payment and collection of the tax to the state.”  Id.  In holding the seller was 
not obligated to include the cigarette tax in its sales tax base, this Court found:  (1) the tax 
was not part of the sales price but was added to the sales price; (2) the tax was a levy on 
the consumer; (3) the seller acted as a mere tax collection agent on the state’s behalf; and 
(4) by acting as an agent, the seller “had no personal interest in the amounts so received.”  
Id. at 17-18.  Consequently, because the seller did not receive the tax for its benefit or use, 
it was not obligated to include the cigarette tax it collected in its sales tax base.  Id. at 18. 
The Rams argue the ELT is akin to the cigarette tax, and they were acting as a tax 
collection agent for the city, thereby urging this Court to find the city is the ultimate 
beneficiary of the ELT, not the Rams.  This Court disagrees.  Unlike the consumers in 
Moore and ITT Canteen, the ELT is not a tax on ticket purchasers who seek admission to 
football games.  Rather, the city’s ordinance requires the Rams, who are in the business of 
10 
 
admitting ticket purchasers who pay an admission charge to view football games, to bear 
the ELT.  The Rams must pay the ELT so they can meet their obligation under the city’s 
ordinance as a condition precedent to receiving the benefit of licensing and conducting 
business in the city to pass this obligation through to ticket purchasers does not transform 
the Rams into the city’s tax collection agent.  Further, the ELT does not contain any of the 
express language found in the cigarette tax statute, which would designate the Rams as the 
city’s tax collection agent or that the ELT should be levied upon ticket purchasers. 
In this case, the sales at retail occurred between the Rams and ticket purchasers who 
paid a fixed admission price to view football games.  Hence, “these are the transactions 
upon which the gross receipts are based and upon which the sales tax should be calculated.”  
Cent. Hardware, 887 S.W.2d at 595.  Section 144.010.1(4) provides,  for the purposes of 
the sales tax law, “the total amount of the sale price … shall be deemed to be the amount 
received.”  The Rams received a fixed dollar amount from ticket purchasers seeking 
admission to football games, which included the ELT.  Accordingly, the total amount the 
Rams received from the ticket purchasers is subject to sales tax and does not constitute a 
tax upon a tax.   
 
 
11 
 
Conclusion 
 
The Commission erred in finding the Rams did not have to pay sales tax on the ELT 
they included and collected from ticket purchasers as the amount paid for admission from 
February 1, 2007, through January 31, 2010, and February 1, 2010, through January 31, 
2013.  The Commission’s decision is reversed, and the cause is remanded. 
 
___________________________ 
GEORGE W. DRAPER III, JUDGE 
 
Fischer, C.J., Wilson, Russell, Breckenridge and Stith JJ., concur. Powell, J., not 
participating.