Court Opinion

ID: 5071157
Source: CourtListenerOpinion
Date Created: 2021-10-01 10:41:01.666085+00
Date Added: 2024-06-11T08:19:49.707521
License: Public Domain

WELLIVER, Justice,
dissenting.
I respectfully dissent.
Missouri first enacted a sales tax in 1933 which taxed the “[s]ales of admission tickets, cash admissions, charges and fees to places of amusement, games and athletic events.” 1933-1934 Mo.Laws, Extra Session 157. In 1935, the section was changed to read “the amount paid, for admission and seating accommodations to any place of amusement, entertainment or recreation, games and athletic events,” 1935 Mo. Laws 415, and “[s]ale at retail” included “sales of admission tickets, cash admissions, charges and fees to places of amusement, entertainment and recreation, games and athletic events.” 1935 Mo. Laws 414. In 1937, the statute was again amended to tax “the amount paid, for admission and seating accommodations, or fees paid to, or in any place of amusement, entertainment or recreation, games and athletic events.” 1937 Mo. Laws 557. Except for amendments raising the rate of the tax, the statute remains unchanged on the books today, codified as § 144.020.1(2), RSMo 1986.
Until 1974, no Director of Revenue ever attempted to impose a sales tax on revenues from coin-operated machines. On May 1, 1974 the Director promulgated Revised Rule No. 49 which interpreted the sales tax law as imposing a sales tax on “any fees, or charges received for the use of any facility or property in any place of amusement, entertainment, or recreation, such as pinball machines, and any other coin operated amusement devices, rides in carnivals and horseback riding.” The tax was challenged in L & R Distributing, Inc. v. Missouri Department of Revenue, 529 S.W.2d 375 (Mo.1975) (hereinafter L & R I). The challenge to the taxing of the coin-operated machines was filed by the owners of the machines as a declaratory judgment action. The Court stated: “This action involves the validity of Revised Rule No. 49 of the Revenue Department which, for the first time, construed § 144.020.1(2) of the Sales and Use Tax Law as imposing the tax upon the gross receipts of coin-operated devices such as pinball machines.” Id. at 375-76. The Director argued that the gross receipts from coin-operated devices or pinball machines were to be taxed because the presence of the machines converted a place into a place of amusement. Id. at 378. The court stated:
We do not believe that the legislature intended any such broad and strained construction of “place of amusement.” To us, the contrary seems much more reasonable, — that a hotel lobby, a restaurant, a motel, a bus station or an airport is not, within normal contemplation, a place of amusement or entertainment, and that it is not converted into such by the installation of a pinball machine. The machines are movable and frequently are moved. Thus, we are convinced that, since the fees must have been paid in a place of amusement, etc., the statute certainly does not clearly and plainly (as defendants say) impose the tax. While we are inclined to feel that wording of the statute plainly excludes the tax, we shall give defendants the benefit of the doubt and consider the statute as though it were ambiguous, as did the trial court.

Id.

The Court then considered prior legislative and administrative construction of § 144.020.1(2) and concluded:
[t]hose interpretations, both administrative and legislative, strongly support the view that such a tax is not imposed, and thus more firmly convince us that the *686legislature did not intend to impose the tax on coin-operated machines. The ascertainment of that intent is our ultimate goal. And no one is better qualified to find and state that intent than the legislature itself. For at least 37 years the Revenue Department claimed no such tax and, in fact, promulgated Rules excluding the tax. In two separate sessions the legislature rejected amendments which would have imposed the tax; that action is much more decisive than mere non-action, and clearly shows the legislature’s view of its own intent. Our own view of the statute is that it does not tax the proceeds of coin-operated machines, and this view is so strongly reinforced that we have no hesitancy in ruling, as we now do, that the Act does not impose a sales tax on pinball or other coin-operated machines.
Id. at 379.
Factually, the Director of Revenue, the legislature and this Court in L & R I, for 37 years construed this statute as not taxing coin-operated machines. The principal opinion seeks to rely on intervening cases1 of this Court to arrive at the conclusion that this same statute now does tax coin-operated machines, unless the proceeds are di minimus as compared with total proceeds of the operator’s overall business. If the identical words of a statute can in 1975, and for 37 years prior thereto, be interpreted as not imposing a tax on proceeds of coin-operated machines, and in 1988 be interpreted as imposing a tax, then surely there is sufficient ambiguity to require that we give something more than lip service to the most basic and fundamental rule of statutory construction — that “[s]tatutes de-lating to taxation are strictly construed against the taxing authority and in favór 'of the taxpayer.” Spudich v. Director of Revenue, 745 S.W.2d 677 (Mo. banc 1988) (quoting Goldberg v. Administrative Hearing Commission, 609 S.W.2d 140,144 (Mo.1980)). Judicial taxation by the spoonful through a series of cases is no more condonable than a megadose of taxation by judicial interpretation administered in a single case.
This case and Spudich handed down contemporaneously herewith, represent the most flagrant taxation without representation. They result in taxation by judicial interpretation, not taxation by legislative enactment by duly elected representatives of the people.
During my years in the practice, it has been my observation that periodically the Director of Revenue has rewritten the regulations of the Department of Revenue, each time seeking to broaden the taxable base, generally without benefit of amendment of the taxing statutes. Prior to L & R I, the Director first adopted old Regulation 49 and here, Regulation 12 CSR 10-3.-176. It is of interest to note that the Court here found it unnecessary to reach the Regulation relied on by the Director of Revenue and in Spudich, taxed 12 coin-operated pool tables contrary to 12 CSR 10-3.176.9 which excepts coin-operated machines where there are less than 15 or more machines.2
So long as this Court continues to approve of taxation by regulation or taxation by judicial interpretation, it is an exercise *687in futility for either the executive or legislative branches to spend tax money attempting to attract business and industry to our state of Missouri. Business is no more attracted to taxation without representation than were the original American colonists.
The cause should be reversed.

. Blue Springs Bowl v. Spradling, 551 S.W.2d 596 (Mo. banc 1977) and L & R Distributing v. Missouri Department of Revenue, 648 S.W.2d 91 (Mo.1983).

. PURPOSE: This rule interprets the sales tax law as it pertains to taxation of fees paid in or to places of amusement, entertainment and recreation. Examples are provided for clarification of interpretations.
(1) Any amount paid for admission and seating accommodations or fees or charges paid in or to a place of amusement, entertainment, recreation, games or athletic events are subject to sales tax.
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(6) No sales tax shall be imposed upon receipts derived from coin-operated amusement devices unless such devices are located within places of amusement, entertainment or recreation.
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(9) ... However, no such geographically separated or set aside area shall be treated as a place of amusement, recreation or entertainment by reason of it containing coin-operated amusement devices, unless such geographically separated area contains more than fifteen (15) coin-operated amusement devices.
12 CRS 10-3.176(1), (6), (9).