Balloons Over the Rainbow, Inc. v. Director of Revenue

Summary

The Supreme Court of Missouri reviews the Administrative Hearing Commission’s denial of a refund and assessment of sales and use taxes against a hot air balloon company. The court holds that Missouri sales taxes on gross receipts from untethered hot air balloon rides are preempted by the federal Anti-Head Tax Act, but concludes that the company is not a common carrier entitled to the claimed use-tax exemption for equipment purchased outside Missouri. The decision is affirmed in part, reversed in part, and remanded.

Holdings

1. The federal Anti-Head Tax Act, 49 U.S.C. § 40116, preempts Missouri sales taxes imposed on gross receipts from all of Balloons' untethered hot-air balloon rides because those receipts arise from air commerce within the meaning of the Act.
2. The claim that rides sold through out-of-state third-party vendors qualified for Missouri's resale exemption is moot because none of the hot-air balloon ride sales were subject to Missouri sales tax under section 144.020.1.
3. Balloons was not a common carrier under section 144.030.2(3) or (20) because it did not establish that it held itself out to transport every member of the public without discretion to refuse service; consequently, it was liable for use tax on the balloon and inflator fan purchased in Texas.

Questions Presented

1. Whether Missouri's sales tax on gross receipts from untethered hot-air balloon rides is preempted by the federal Anti-Head Tax Act.
2. Whether sales of balloon rides through out-of-state third-party vendors qualified for Missouri's resale exemption or otherwise were taxable as retail sales.
3. Whether Balloons qualified as a common carrier under section 144.030.2(3) or (20) and therefore was exempt from use tax on a hot-air balloon and inflator fan purchased outside Missouri.

Disposition

reversed_and_remanded