Administrative Hearing Commission

Richard Maseles, Esquire

Plant owner not entitled to exemption from use tax for chemicals or fuels used in manufacturing chemicals. BASF Corp. v. Director of Revenue, No. 08-0543 RS (Mo AHC, February 22, 2012), Winn, C.

BASF manufactured herbicides and insecticides at its Hannibal Plant. The Director audited the plant, finding it liable for use tax on chemicals, natural gas, coal, and electricity used in operations. BASF paid the tax, filed for a refund claim (which was denied), and appealed.

:  The refund claim was again denied. The Commission held that the Hannibal Plant was not a material recovery processing plant for purposes of §144.030.2(4) & (12), because even though the Hannibal Plant may have engaged in recovery and reuse of materials by the plain meanings of those words, the statutory definition, found at § 260.200(28), applied, not a plain definition. Also, the definition found in § 260.200 was used in two other places in Chapter 144. Further, BASF was liable for use tax on the chemicals used because, while they were supplies, they were not required solely for the operation of exempt machinery or equipment, as they did not fit within the definition of “materials” set out in E&B Granite v. DOR, 331 S.W.3d 314, 318 (Mo. banc 2011). Similarly, BASF’s purchases of coal, electricity, and natural gas were not exempt from tax under § 144.030.2(4), also because they were not required solely for the operation of exempt machinery or equipment.

Default decision entered for case filed before effective date of licensing statutes allowing defaults, but where licensee was served after effective date. State Bd. for Respiratory Care v. Cheney, No. 11-1332 RC (Mo AHC, February 16, 2012; motion to set aside denied March 23, 2012), Nelson, C.

On June 22, 2011, the board filed a complaint to discipline Cheney’s respiratory care practitioner license for failure to document completion of her continuing education activities as requested by the board. She was personally served with the complaint on September 19, 2011 but did not respond, and the Board moved for default decision.

: A default decision was entered. Sections 621.045.6 and 621.100.2, which became effective August 28, 2011, required entry of a default decision even though the complaint was filed before the effective date of the law, because the statutes were intended to apply retroactively, and were procedural and not substantive in content, and thus did not violate Mo. Const. Art. I, § 13. Cheney moved to set aside the default raising, among other issues, her then-pending acrimonious divorce and her belief that, because she received correspondence from the Board and a notice from the commission setting a hearing date, she did not need to file an answer, but the motion was denied for failure to state facts constituting a meritorious defense to the complaint itself.