Court Opinion

ID: 9653367
Source: CourtListenerOpinion
Date Created: 2023-08-23 17:45:18.065305+00
Date Added: 2024-06-11T18:12:58.355647
License: Public Domain

BARDGETT, Chief Justice,
dissenting.
I respectfully dissent.
The facts have been stated in the principal opinion. Respondent Canteen Corporation was in control of the food which it, through its employees, served to the consumers, who are residents of Council Plaza, a retirement home, and the entire food operation was in the total control- of Canteen Corporation. The prices of the meals were fixed in the contracts between Council Plaza and Canteen Corporation, and the serving of these meals to the residents was in satisfaction of contractual obligations undertaken by Council Plaza to the residents. The contract itself states that its purpose was to allow respondent Canteen Corporation to conduct a restaurant and catering business on the premises of Council Plaza. No Council Plaza employees were in control of the food at any time. Under the contract respondent was obligated to prepare and serve two meals a day for each registrant and to dispose of all leftovers, as well as to pay all taxes assessed against equipment or merchandise as a result of this operation.
The burden of proving that the sale of the food in this instance was not a sale at retail is upon the person who made the sale. An exemption certificate signed by the purchaser [Council Plaza] or its agent is required to be kept by the seller [Canteen Corporation] as evidence of any exempt sales claim. Section 144.210 RSMo 1969. Exemption certificates are acknowledgments by the purchaser of goods that the sale to the purchaser was not a sale at retail but a sale for resale. Canteen Corporation did not obtain any such certificates from Council Plaza in this case. Council Plaza was legally obligated to pay Canteen "for the meals whether or not Council Plaza received payment from the residents.
In my opinion there is no substantial evidence to support a finding that there was, in fact, first a sale by Canteen to Council Plaza of meals for resale and then a resale of the meals by Council Plaza to the retirees. In my opinion the evidence clearly supports the finding that the only sale was from Canteen to Council Plaza at retail and not for resale. As noted, Council Plaza was merely carrying out its contract with the residents in the purchase of these meals *758from Canteen. This is quite similar to American Airlines, Inc., v. Department of Revenue, 58 Ill.2d 251, 319 N.E.2d 28 (1974), in which sales of good by a caterer to an airline for in-flight service to passengers were considered sales at retail for use and consumption by the airline. Obviously the airline does not eat meals; but, nevertheless, it was the airline that agreed to supply the customers with meals, and the airline satisfied its contractual obligation by contracting with the caterer and purchasing the meals from the caterer for service to the customers.
Therefore, in my opinion, the trial court was in error in holding that the sale by Canteen to Council Plaza of meals constituted a sale for resale. In my opinion the sale by Canteen to Council Plaza was a sale at retail and was properly subject to sales tax. I would therefore reverse the trial court’s holding on this issue with directions to reinstate the decision of the Director of Revenue.
As noted in the principal opinion, the second issue on appeal involves sales through a vending machine. The example given is a candy bar that can be purchased out of the machine by inserting twenty-five cents. The advertised price of this candy bar is twenty-five cents. The Director of Revenue imposed a tax on the twenty-five cents. That was the price the seller advertised on the machine as the selling price of the product. The sales tax in Missouri is a tax upon the seller for the privilege of engaging in the business of selling tangible personal property, etc. Section 144.020.1 RSMo Supp.1973. It is a tax that is imposed upon the gross receipts, which means the total amount of the sale price of the sale at retail. Sections 144.010.1 and 144.-021 RSMo 1969. The seller is prohibited from advertising, holding out, or stating to the public or any customer, directly or indirectly, that the tax or any part thereof will be assumed or absorbed by the seller or that it will not be separately stated and added to the selling price of the property sold. Violation of this provision is a misdemeanor. Section 144.080.5 RSMo 1969.
It is clear that if a person purchased a candy bar advertised in a counter for sale at twenty-five cents and paid the sales person twenty-five cents fór that candy bar, the sales person would be required to collect the sales tax on the twenty-five cents in addition to the twenty-five cents, and the seller’s liability would be for the tax on the gross twenty-five . cent sale. The seller would not be allowed to avoid payment to the state of sales tax on the full twenty-five cents by simply contending that the advertised price of twenty-five cents included the sales tax. That would be a violation of § 144.080.5, supra. I find no provision in the sales tax act applicable to this case that permits the seller to exercise any discretion with respect to the amount or percentage of the sales price for which he will become obligated to the state on any particular sale. It is clear from that act that the tax is on the total sales price or gross receipts when speaking of a number of sales. In my opinion there is no provision in that act that allows the merchant to claim that the sales price is something less than the price listed by the merchant for sale of the product simply because he happens to sell the product by way of a machine. In my opinion the holding of the principal opinion permits the merchant to pay a tax on something less than the sales price of the product and that, I submit, is contrary to the provisions of the sales tax act applicable to this case. The statute imposed the tax on the sales price but the principal opinion authorizes the tax to be imposed on a sum less than the sales price.
I would therefore reverse the judgment of the circuit court as to this issue with directions to reinstate the finding of the Director of Revenue.