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Administrative Hearing Commission

Richard Maseles, Esquire

President and sole shareholder of corporation properly assessed responsible party liability for unpaid sales taxes-agency theory rejected. Barlow v. Director of Revenue, No. 09-0860 (MO. AHC, May 4, 2011), Nelson, C.

Barlow was the president and sole shareholder of a corporation that took orders for hotel furnishings from customers, bought the furnishings elsewhere, and resold them to the customers. The corporation never filed sales tax returns or collected or paid sales tax. After the corporation dissolved, the Director assessed responsible party liability against Barlow. The Commission decided in the Director's favor, rejecting Barlow's argument that the profits from each sale were not agency fees, because there was no agency relationship, but a purchase and resale-See: Martin Coin Co. of St. Louis v. Director of Revenue, 665 S.W.2d 939, 942 (Mo. banc 1984). The Commission also rejected Barlow's defense that someone else was in charge of taxes, because under Section 144.157.3, RSMo, she had direct control, supervision or responsibility for filing returns and paying taxes.

Sales tax exemption for electricity used for processing applies to processing of food products. Aquila Foreign Qualifications Corp. v. Director of Revenue, No. 09-0376 RS (Mo. AHC, April 28, 2011), Winn, C.

Aquila was a utility company that sold electricity to a chain of convenience stores. It charged sales tax on such sales, then sought a refund from Revenue, which denied it. The Commission reversed the Director's decision, deciding that the stores' activities in making snack foods constituted "processing" as the term was (broadly) defined by the legislature in Section 144.054.1(1), RSMo. Section 144.054 set out a new exemption, not just an extension of existing exemptions, and its term "production facility" was broader than "plant", the term used in Brinker v. Director of Revenue, 319 S.W.3d 433 (Mo. banc 2010). Brinker does not control here.

The Missouri Bar Courts Bulletin, 11-May