Latest Case This Week: DI Supply I, LLC v. Director of Revenue (Mo.)

DI Supply I, LLC v. Director of Revenue

Court: Supreme Court of Missouri

Docket: SC97932

Opinion Date: March 17, 2020

Judge: Powell

Areas of Law: Government & Administrative Law, Tax Law

The Supreme Court affirmed the decision of the Administrative Hearing Commission determining that DI Supply I, LLC's room furnishing sales to the Drury Hotels were not exempt from sales tax under the resale exemption in Mo. Rev. Stat. 144.010.1(11), holding that DI Supply failed to meet its burden to prove that the items it sold to Drury Hotels were resold by the hotels. An audit determined that DI Supply failed to remit sales tax on more than $11 million in taxable sales of room furnishings to Drury Hotels during the audit period. DI Supply contested the tax liability, arguing that the items of tangible personal property were purchased for resale to hotel guests and not subject to Missouri local sales or use tax. The Commission upheld $613,159 of the assessment for sales tax and interest. On appeal, DI Supply contested its sales tax liability for sales of room furnishings to Drury Hotels. The Supreme Court affirmed, holding that DI Supply failed to show that Drury Hotels transferred title or ownership of the room furnishings and, therefore, failed to show the applicability of the resale exemption by clear and unequivocal proof.