Court Opinion

ID: 9750334
Source: CourtListenerOpinion
Date Created: 2023-08-28 14:50:43.844924+00
Date Added: 2024-06-11T07:26:07.693212
License: Public Domain

WILLIAM RAY PRICE, JR., Chief Justice,
dissenting.
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, 794 S.W.2d 204 (Mo. banc 1990) (financial company that supplied information about securities traded on public markets), 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 transmit*442ting 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 48, 51 (Mo.1983) (treating and purifying water); Wilson & Co., Inc. v. Department of Revenue, 531 S.W.2d 752, 755 (Mo.1976).
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.