Case Name: STAR SERVICE & PETROLEUM COMPANY, Appellant, v. ADMINISTRATIVE HEARING COMMISSION, State of Missouri, and Gerald H. Goldberg, Director of Revenue, State of Missouri, Respondents
Court: Supreme Court of Missouri
Jurisdiction: Missouri
Decision Date: 1981-10-13
Citations: 623 S.W.2d 237
Docket Number: No. 62430
Parties: STAR SERVICE & PETROLEUM COMPANY, Appellant, v. ADMINISTRATIVE HEARING COMMISSION, State of Missouri, and Gerald H. Goldberg, Director of Revenue, State of Missouri, Respondents.
Judges: DONNELLY, C.J., SEILER, MORGAN, HIGGINS and BARDGETT, JJ., concur.
Reporter: South Western Reporter Second Series
Volume: 623
Pages: 237–242

Head Matter:
STAR SERVICE & PETROLEUM COMPANY, Appellant, v. ADMINISTRATIVE HEARING COMMISSION, State of Missouri, and Gerald H. Goldberg, Director of Revenue, State of Missouri, Respondents.
No. 62430.
Supreme Court of Missouri, En Banc.
Oct. 13, 1981.
Brian C. Underwood, William A. Richter, Peper, Martin, Jensen, Maichel & Herlage, St. Louis, for appellant.
John Ashcroft, Atty. Gen., Richard L. Wieler, Asst. Atty. Gen., Jefferson City, for respondents.

Opinion:
WELBORN, Commissioner.
Petition for review of decision of Administrative Hearing Commission, dismissing complaint before Commission and affirming decision of Department of Revenue denying claim for refund of sales tax paid in error.
According to the "Stipulation of Uncontested Facts," filed before the Administrative Hearing Commission, Star Service & Petroleum Company erroneously computed and paid sales taxes to the Missouri Department of Revenue for the reporting periods from November, 1976, through October, 1977, in at least the amount of $36,212.50. On December 21, 1978, Star applied for a credit or refund of such erroneous payment. The Department of Revenue denied the application for credit or refund on the grounds that the one-year limitation for refund or credit found in Section 144.190, RSMo 1969, had expired prior to the filing of the claim.
Star's complaint for review of the Department's denial of its claim asserted that, in view of the fact that a claimant for refund of an erroneously paid use tax would have, under Section 136.035, RSMo 1969, two years within which to file a claim for refund, the one-year limitation applicable to sales tax claims unreasonably and arbitrarily discriminated against such claimants, in violation of the equal protection clauses of the federal and state constitutions. Star's complaint prayed for such a finding by the Commission; for a finding that the one-year limitation of Section 144.190 was unconstitutional and void; that the general two-year statute (Section 136.035) applied to sales taxes; and that it was entitled to credit or refund of $36,213.50.
Upon submission of the matter to the Commission, it concluded that, under City of Joplin v. Industrial Commission of Missouri, 329 S.W.2d 687, 689 (Mo.banc 1959), the Commission, as an administrative agency, lacked authority to declare Section 144.-190 unconstitutional. The Commission dismissed the case, but also affirmed the decision of the Department of Revenue.
Star filed its petition for review in this court, stating, as its sole grounds for relief, the unconstitutionality of Section 144.190 and the consequent application of Section 136.035 to its claim.
(It should be noted that, in 1979, the legislature amended Section 144.190, making it applicable to both sales and use taxes and providing a two-year limitation on claims for refund of either of such taxes. Laws of Mo. 1979, p. 339. This act became effective January 1, 1980, and is thus inapplicable to the controversy.)
The question presented in this case arose by reason of the following legislative action:
What was Section 144.190 as it stood at the inception of this case was originally found in the 1939 sales tax law. Laws of Mo. 1939, p. 855, § 26. Section 136.035 first appeared in 1951. Laws of Mo. 1951, p. 866. In IBM v. State Tax Comm., 362 S.W.2d 635, 639-640[2]—[4] (Mo.1962), the court held that the 1951 enactment did not repeal Section 144.190 by implication and that the latter section remained applicable to claims for refund of erroneously paid sales tax. The use tax law was enacted in 1959. Laws of Mo. 1959, H.B. No. 35. Section 14 of that enactment, which appeared as Section 144.-695, provided for refund of excess use tax payment, but contained no time limitation upon application for refund or credit. The Director of Revenue, by regulation (12 CSR 10 — 4.275), applied Section 144.190 to use tax claims.
Appellant's primary reliance in this case is upon Southwestern Bell Telephone Company v. Morris, 345 S.W.2d 62 (Mo.banc 1961), in which the court held invalid exemptions found in the original use tax which had no parallel in the sales tax law. In that case the court pointed out the complementary and supplementary relationship between the sales tax and the use tax and held that the validity of exemptions from the latter tax should be viewed in the light of their effect in " protecting the potential of the tax base as established by the Sales Tax Act 345 S.W.2d 68[5]. The court stated that the equal protection clause prohibited " exclusions not based on differences reasonably related to the purposes of the act." 345 S.W.2d 66. On that basis, the court invalidated exemptions from the use tax which would have defeated the purpose of the use tax by providing use tax exemptions not found in the sales tax law.
Southwestern Bell does not establish the proposition that, in all respects, the sales and use tax laws must operate uniformly. As the court pointed out there, the primary objective of the use tax is protection of the sales tax base by levying a tax which would offset an inclination on the part of purchasers to buy outside the state in order to avoid the sales tax. The exemptions held invalid in Southwestern Bell were at war with that purpose.
The differences between the sales and use tax laws, involved in this case, do not go to the basic purpose of the latter as did the differences in Southwestern Bell. It would be farfetched to assume that purchasers would be less inclined to deal with Missouri sellers because any claim for refund of sales tax must have been made within one year whereas a claim for refund of use tax might have been made within two years.
Although the sales and use taxes are "complementary and supplementary," they are separate taxes, arising out of different incidents. The sales tax is now a tax on gross receipts for the privilege of engaging in the business, in the state, of selling tangible personal property and certain specified services. § 144.021, RSMo 1978. The use tax is imposed upon the privilege of storing, using or consuming tangible personal property in the state. § 144.610. As noted in IBM, the nature of the sales tax is such that refunds made to a seller may well produce a "windfall" to the seller who has collected the tax from the purchaser, affording " good and sufficient reasons for limiting the remedy, particularly the time in which claims for refunds of sales taxes must be made." 362 S.W.2d 641[4].
Basically, the regulation of tax refunds is a legislative matter. The taxes here involved being separate, although complementary, and the distinction not going to the basic purposes of such taxes, the legislature was free to fix different provisions for refund of each of the taxes.
The 1979 legislative enactment making the time for refund the same for both sales and use taxes does not evidence a constitutional infirmity in the previous statutes. The legislature may well have concluded that, as a matter of policy, a uniform time limitation with respect to these taxes is preferable.
Judgment affirmed.
PER CURIAM:
The Division Two opinion by WELBORN, C., is adopted as the opinion of the Court en Banc.
DONNELLY, C.J., SEILER, MORGAN, HIGGINS and BARDGETT, JJ., concur.
WELLIVER, J., dissents in separate dissenting opinion filed.
RENDLEN, J., dissents and concurs in separate dissenting opinion of WELLIVER, J.