Administrative Hearing Commission

Richard Maseles, Esquire

No refund on sales tax for utilities provided to bakery departments of grocery chain, because bakeries were not engaging in “processing.” Union Electric Co. d/b/a Ameren Missouri v. Director of Revenue, No. 11-0427 RS (Mo. AHC, December 19, 2012), Dandamudi, C.

Ameren sold electricity and natural gas to Schnucks Markets throughout Missouri for use in Schnucks’ bakery departments, then sought a refund on Schnucks’ behalf on the ground that the sales were exempt from sales tax under § 144.054.2, because the electricity and gas were being used in processing.

DECISION: Ameren was not entitled to a refund. While the case was pending, the Supreme Court issued its opinion in Aquila Foreign Qualifications Corp. v. Director of Revenue, 362 S.W.3d 1, where it held that the preparation of food for retail for consumption was not “processing” within the meaning of § 144.054.2. Ameren tried to distinguish this case from Aquila, but the Commission found sufficient similarities between the two stores’ operations (Aquila operated Casey’s General Stores, which made pizza and doughnuts in its stores) to be satisfied that the plain holding of Aquila applied to this case.