Business Aviation, LLC and Vaughn C. Zimmerman v. Director of Revenue

Summary

The Supreme Court of Missouri held that Business Aviation, LLC transferred the right to use an aircraft to Burgess Aircraft Management, a common carrier, for valuable consideration. Accordingly, the aircraft purchase qualified for Missouri's resale use-tax exemption through the applicable statutory provisions. The court reversed the Administrative Hearing Commission's decision and remanded the matter.

Holdings

1. A lease transfers the right to use tangible personal property when it transfers the exercise of a right or power over the property incident to ownership or control; the lease transferred that right from Business Aviation to Burgess.
2. Valuable consideration does not require payment of the exact amount stated in a lease, an exchange of checks, a profit to the lessor, or proof of an actual benefit; the payments and credits made by Burgess for use of the aircraft constituted valuable consideration.
3. Because Business Aviation transferred the right to use the aircraft to a Missouri common carrier for valuable consideration paid or to be paid, the aircraft purchase qualified for the resale tax exemption under sections 144.018.1(4), 144.615(3), and 144.030.2(20).

Questions Presented

1. Whether the aircraft lease transferred the right to use the aircraft from Business Aviation to Burgess for purposes of the Missouri resale use-tax exemption.
2. Whether the payments made or credited under the lease constituted valuable consideration even when some related-party charter flights were billed at a discounted rate and the payment did not equal the lease's stated hourly rate.
3. Whether Business Aviation therefore qualified for the resale exemption under sections 144.018.1(4), 144.615(3), and 144.030.2(20).

Disposition

reversed_and_remanded