Hallmark Cards, Inc. v. Director of Revenue

WILLIAM RAY PRICE, JR, Judge,

dissenting.

I.

I respectfully dissent because a statute may not be applied retrospectively without clear legislative intent.

Between June 2000 and May 2003, Hallmark overpaid its Missouri and local sales tax. During most of that period, the statutes governing tax refunds mandated that interest be paid on overpaid taxes. Sec. 144.190.2, RSMo 2000. On June 19, 2002, a new statutory scheme governing tax refunds was enacted. In January of 2003, the statutory provision took effect that allows for a new method of interest calculation on tax refunds. As part of this new scheme, the director of revenue can now avoid paying any interest when refunds are handled within 120 days of filing.

*355On June 18, 2003, Hallmark filed a claim for a refund and interest on all of its overpaid taxes. The director issued the refund and denied the request for all interest both before and after December 31, 2002, because it handled the refund within 120 days of filing. Hallmark disputes the denial of interest on its refund from the period before December 31, 2002, because the statute did not expressly provide for retroactive application.

“Statutes are generally presumed to operate prospectively, unless the legislative intent that they be given retroactive operation clearly appears from the express language of the act or by necessary or unavoidable implication.” Dept. of Soc. Serv. v. Villa Capri Homes, Inc., 684 S.W.2d 327, 332 (Mo.1985) (internal cite omitted). Formerly the payment of interest was governed by section 144.190.2, which provides:

If any tax, penalty or interest has been paid more than once, or has been erroneously or illegally collected, or has been erroneously or illegally computed, such sum shall be credited on any taxes then due from the person legally obligated to remit the tax pursuant to sections 144.010 to 144.525, and the balance, with interest as determined by section 32.065, RSMo, shall be refunded to the person legally obligated to remit the tax....

In contrast, the new scheme established by section 32.069, RSMo Cum.Supp.2003, provides: “Notwithstanding any other provision of law to the contrary, interest shall be allowed and paid on any refund or overpayment at the rate determined by section 32.068 only if the overpayment is not refunded within one hundred twenty days....” Section 32.068, in turn, provides: “Beginning January 1, 2003, the director of revenue shall apply the calculated rate of interest as determined by this section to all applicable situations.” Sections 32.068 and 32.069 give no express indication that the new scheme applies retrospectively to interest accrued before the January 1, 2003 beginning date.

Section 144.190.2, the existing authority before the change, provided for payment of interest regardless of the director’s timeliness in issuing the refund. The majority correctly cites International Business Machines Corporation v. Director of Revenue for the proposition that interest does not apply to a refund claim unless a statute expressly provides for it. 362 S.W.2d 635, 641 (Mo.1962). However, the Court then incorrectly looks to the new statute rather than the statute in existence when Hallmark’s interest was accruing. Section 144.190.2 governed all of Hallmark’s claims arising from refunds pertaining to taxes before the new scheme took effect. Section 144.190.2 expressly provides that “the balance, with interest as determined by section 32.065, RSMo, shall be refunded.... ”

Without an express statutory statement that the old scheme should be retrospectively supplanted, Hallmark is entitled to accrued interest on its refund through December 31, 2002.