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“Common Carrier” Tax Exemption Lost When Operator Reserves the Right to Select Its Passengers

The Balloons Over the Rainbow decision also considered whether the ride operator qualified for the “common carrier” exemption from Missouri use taxes on its out-of-state equipment purchases.  Because the operator reserved the right to reject passengers presenting themselves for carriage, the Missouri Supreme Court found that it did not qualify for “common carrier” status and was therefore liable for Missouri use taxes.