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ICSC Legal Database - CasesMonday, February 22, 1999 05:01 PM

Case Index:
00142

Citation:
Bally's Leman's Family Fun Center Inc. v. Director of Revenue, 745 S.W.2d 683 (Mo. 1988) (en banc).

Issue:
Whether fees collected from coin operated games which were located in "fun centers" were subject to a

Missouri state sales tax?

Facts:
Plaintiff-Bally's LeMan's Family Fun Center, Inc. operated eight fun centers in shopping malls throughout

Missouri. These fun centers contained only coin operated games and there were more than forty such games in

each center. Defendant the Director of Revenue in Missouri assessed a sales tax on Plaintiff's proceeds from

the coin operated games. The sales tax statute applied to "fees paid to, or in any place of amusement,

entertainment or recreation". A Regulation promulgated by the Director provided that "no sales taxes shall be

imposed upon receipts derived from coin-operated amusement devices unless such devices are located within

places of amusement,

entertainment or recreation.' The Administrative Hearing Commission upheld Defendant's assessment. Plaintiff

sought review in the Supreme Court of Missouri.

Holding:
Affirmed. The Court held that there was no ambiguity in the Missouri sales tax statute, section 144.020.1(2),

and that Plaintiff's fun centers constituted "places of amusement" for purposes of the statute. Therefore,

Defendant properly assessed a sales tax on the proceeds from Plaintiff's coin operated games. Plaintiff asserted

 that section 144.020.1(2) was ambiguous and that it was necessary to examine Regulations issued by

Defendant for clarification. The court found no ambiguity and the legislative intent to impose a sales tax on coin

operated games was found in the clear language of the statute. Dissent: Section 144.020.1(2) remained

unchanged, since 1937, except for amendments raising the tax rate. In 1975, this Court held that there was no

sales tax imposed on proceeds from coin-operated machines. Subsequently, this same court has interpreted

the statute as imposing a

sales tax on these machines. The dissenting judge concluded that this demonstrates that there was an

ambiguity in the statute and that the Defendant's tax assessment on Plaintiff's coin operated games should

have been reversed.

Publication:
Legal Update

Date:
Winter 1988

Classification 1:
Taxation

Classification 2:

Classification 3:

00142 - Legal Update - Winter 1988