The Missouri Boat Ride  
It is hard to imagine that any state is more business taxpayer-friendly than Missouri. In a recent decision by the Administrative Hearing Commission in Six Flags Theme Parks, Inc. v. Director of Revenue, No. 03-1919 RS, Dec. 3, 2004, the Commission granted sales tax refunds to the park. The taxes refunded had been collected from park guests on the rental fees paid for the use of inner tubes in the park. Six Flags had paid tax on the purchase of the inner tubes and an interesting provision of the Missouri sales tax law provides that the rental tax is inapplicable if “the tax was paid at the time of purchase.”

Six Flags had previously recovered in litigation receipts from video games on the same basis, even though Six Flags did not own the video machines or pay the tax on purchase, but merely a “contract with the owner of the machines allowing the owner to place them at the [park]. Six Flags Theme Parks v. Director of Revenue, 102 S.W.2d 526 (Mo. banc 2003) and the Commission felt bound to follow that precedent. The Commission distinguished a contrary decision concerning tax on fees for the use of bowling shoes, saying “the present case does not involve bowling.” It rejected other arguments as well, clearly overcome by notions of stare decisis. In fact, Six Flags made clear that although it had collected the tax in question from park guests, it intended to retain for its own account any refunds that it secured, and the Commission admitted that “we find this result inequitable,” but said that it had no power “to change or add to the requirements of the statute.”

One should not expect a similar result in Florida. Double taxation and resale arguments have been made before in similar factual contexts and rejected. See e.g., American Video Corporation v. Lewis, 389 So.2d 1059 (Fla. 1st DCA 1980) (refund for tax on drop-items purchased by cable company denied–no rental of same to cable customers and so no resale) and Florida Hotel and Motel Association v. Dept. of Revenue, 635 So.2d 1044 (Fla. 1st DCA 1994) (no resale by hotels and motels of tangible personal property in guest rooms–purchase by hotel/motel and transient rentals by hotel/motel to guests are two different transactions, so no double taxation).

Posted: 2005-03-08 00:00:00.0

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