Six Flags Theme Parks, Inc. v. Director of Revenue

WILLIAM RAY PRICE, JR., Judge.

Petition for Review

I.

The Director of Revenue (Director) seeks review of the decision of the Administrative Hearing Commission (AHC) granting a refund of sales tax paid on fees collected by Six Flags Theme Parks, Inc. (Six Flags) on the rental of inner tubes. The inner tube rentals are not subject to Missouri sales tax, pursuant to Section 144.020.1(8),¹ because sales or use tax was paid on the purchase of the inner tubes before they were rented to patrons. The AHC’s decision is affirmed.

II.

Six Flags is a Delaware corporation that operates a theme park (“the park”) in Eureka, Missouri. The park is a place of amusement containing rides, such as roller coasters and ferris wheels, and a water park area (“the water park”). Various rides in the water park require the use of an inner tube. Six Flags provides inner tubes for no charge at each ride for which an inner tube is required.

The water park also contains a wave pool. Patrons can, and often do, use the wave pool without an inner tube. Patrons may rent an inner tube for use in the wave pool. The free inner tubes and the rental inner tubes are the same, except in color.

Free inner tubes cannot be taken to the wave pool, but the rented inner tubes can be used on the rides that require an inner tube. Patrons using rented inner tubes on these other rides can avoid waiting in line to obtain a free inner tube.

Six Flags paid sales or use tax on all of its purchases of inner tubes used at the water park. Six Flags also paid sales or use tax on the fees charged for inner tube rentals during the period from June 2000 through September 2000. Six Flags filed a claim for a refund of the Missouri taxes paid on these rental fees pursuant to the double taxation avoidance provision of Section 144.020.1(8). The Director issued a final decision denying Six Flags’ claim for a refund. The AHC reversed the Director’s decision and granted a refund, relying on this Court’s decisions in Six Flags Theme Parks, Inc. v. Director of Revenue, 102 S.W.3d 526 (Mo. banc 2003), and Westwood Country Club v. Director of Revenue, 6 S.W.3d 885 (Mo. banc 1999). The Director appeals.

III.

“This Court has jurisdiction pursuant to Mo. Const, art. V, section 3 and reviews the AHC’s interpretation of revenue law de novo." Southwestern Bell v. Director of Revenue, 94 S.W.3d 388, 390 (Mo. banc 2002) (citations omitted). “This Court will uphold the AHC’s decision if authorized by law and supported by competent and substantial evidence upon the whole record.” Id. (internal quotations omitted).

IV.

Two statutes apply to this dispute. Section 144.020.1(2) levies “[a] tax equivalent to four percent of the amount paid for admission and seating accommodations, or fees paid to, or in any place of amusement.” Section 144.020.1(8) levies:

A tax equivalent to four percent of the amount paid or charged for rental or lease of tangible personal property, provided that if the lessor or renter of any tangible personal property had previously purchased the property under the conditions of “sale at retail” as defined in subdivision (8) of section 144.010 or leased or rented the property and the tax was paid at the time of purchase, lease or rental, the lessor, sublessor, renter or subrenter shall not apply or collect the tax on the subsequent lease, sublease, rental or subrental from that property.

The goal of statutory construction is to give effect to the legislature’s intent. Corvera Abatement Technologies v. Air Conservation Commission, 973 S.W.2d 851, 858 (Mo. banc 1998). When statutory language is “clear, unambiguous, and admits of only one meaning, there is no room for construction.” Id.

The plain, simple, and unambiguous terms of section 144.020.1(2), when read in isolation, would impose a tax upon the inner tube rentals, while the plain, simple, and unambiguous terms of section 144.020.1(8), when read in isolation, would not. This Court has previously addressed the interaction of these two sections for rentals or leases of property in places of amusement in Six Flags Theme Parks, Inc. v. Director of Revenue, 102 S.W.3d 526 (Mo. banc 2003), and Westwood Country Club v. Director of Revenue, 6 S.W.3d 885 (Mo. banc 1999). These cases hold “that section 144.020.1(8) is a more specific statute than section 144.020.1(2),” thus section 144.020.1(8) controls the situation when it is applicable. Westwood Country Club, 6 S.W.3d at 889; see also Six Flags Theme Parks, 102 S.W.3d at 529. A separate, but equally compelling rational that “the goal of taxing the property only once is met by not taxing the subsequent rental to customers” was also expressed. Id. at 530. This reading harmonizes the two sections and we reaffirm the holdings of these two cases.

V.

Blue Springs Bowl v. Spradling, 551 S.W.2d 596 (Mo. banc 1977), and Eighty Hundred Clayton Corp., d/b/a Tropicana Lanes v. Director of Revenue, 111 S.W.3d 409 (Mo. banc 2003) [hereinafter Tropicana Lanes], while similar, do not control this controversy. Blue Springs Bowl merely held that the “fees or charges paid for participating in the activity of bowling at a commercial bowling establishment” were included in the statutory language of section 144.020.1(2). 551 S.W.2d at 597, 602. The decision did not address the applicability of 144.020.1(8) to the rental of personal property.

Tropicana Lanes, refused to overrule Westwood Country Club and its progeny. It merely held that the doctrine of stare decisis required the application of Blue Springs Bowl to a controversy involving bowling shoes. 111 S.W.3d at 410-11. Tropicana Lanes is somewhat inconsistent with the eases that considered section 144.020.1(8). Westwood Country Club holds that fees paid to rent golf carts are not taxable and Six Flags Theme Parks holds that fees paid to rent arcade machines are not taxable. To some extent, fees charged for bowling shoes may be distinguished from fees charged for the rental of golf carts, arcade machines, or inner tubes. Bowling shoes are required to bowl. Id. at 410. Bowling shoes can also be brought from home, rather than rented from the bowling alley. Id. Golf carts are not required to play golf; arcade machines are not required to visit the Six Flags Theme Park; inner tubes are not required for the wave pool in Six Flags’ water park. Tropicana Lanes should be restricted to its facts.

VI.

The Director makes three other arguments, which we will address in turn.

A.

The Director argues that the use of these inner tubes was not a “rental or lease.” Webster’s provides that “rent” means “a piece of property that the owner allows another to use in exchange for a payment in services, kind or money.” Webster’s Third New International Dictionary 1923 (3d ed.1981). The Director argues that patrons did not obtain sufficient “use” to constitute a lease, because patrons did not obtain complete control over the inner tubes.²

The fact that patrons could not remove the inner tubes from the water park or engage in any activity that they please with the rental inner tubes does not preclude a finding that they were rented. Patrons in Six Flags Theme Parks could not take the arcade games home with them, nor could guests of the golf course in Westwood Country Club drive their rented golf carts into the dining room of the country club. The patrons in all three of these controversies had sufficient possession, control, and use of the rented tangible personal property for which they paid a fee to constitute a rental or a lease.

B.

The Director argues that the “Boat and Outboard Motor” exception to section 144.020.1(8) shows a legislative intent that only boats and outboard motors be precluded from taxation under section 144.020.1(8). The Director’s argument is misguided, the “Boat and Outboard Motor” exception provides that:

In no event shall the rental or lease of boats and outboard motors be considered a sale, charge, or fee to, for or in places of amusement, entertainment or recreation nor shall any such rental or lease be subject to any tax imposed to, for, or in such places of amusement, entertainment or recreation. Rental and leased boats or outboard motors shall be taxed under the provisions of the sales tax laws as provided under such laws for motor vehicles and trailers.

This is not a situation for use of the maxim expressio unius est exclusio (or omissions shall be understood as exclusions), for that maxim “is to be used with great caution.” Pippins v. City of St. Louis, 823 S.W.2d 131, 133 (Mo.App.1992). The maxim should be invoked only when it would be natural to assume by a strong contrast that that which is omitted must have been intended for the opposite treatment. Springfield City Water Co. v. City of Springfield, 353 Mo. 445, 182 S.W.2d 613, 618 (1944). The “Boat and Outboard Motor” exception is merely intended to be sure that boats and outboard motors are taxed under the “laws for motor vehicles and trailers.” Section 144.020.1(8). The strong inference needed for the maxim expressio unius est exclusio is not present.

C.

Finally, the Director argues that Six Flags is not entitled to the refunded tax money because it was ultimately charged to its patrons. However, Missouri’s statutory scheme places the burden of remitting taxes to the Director on the seller. Section 144.021. Furthermore, we have long recognized the right of the seller to refunded tax money, even if the taxes were paid by the seller’s patrons. See e.g., Shelter Mutual Insurance Co. v. Director of Revenue, 107 S.W.3d 919 (Mo. banc 2003); Buchholz Mortuaries, Inc. v. Director of Revenue, 113 S.W.3d 192 (Mo. banc 2003); Galamet, Inc. v. Director of Revenue, 915 S.W.2d 331 (Mo. banc 1996). Any change in this scheme is for the legislature to make, not the courts.

VII.

For the foregoing reasons, the decision and judgement of the AHC is affirmed.

TEITELMAN, RUSSELL and WHITE, JJ., concur: LIMBAUGH, J., concurs in separate opinion filed. LAURA DENVIR STITH, J., dissents in separate opinion filed; WOLFF, C.J., concurs in opinion of LAURA DENVIR STITH, J.

1 . All statutory references are to RSMo 2000.

2 . The Director’s argument focuses on the fact that patrons could not remove the inner tubes from the water park or use them on certain rides in the water park.