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Circuit court sides against tax, attorney gives away $20,000 fee

Friday, May 30, 2008

The Circuit Court of Jefferson County has ruled that a Missouri municipality violated Missouri law by increasing its sales taxes to unlawfully high rates. Circuit Judge Robert Wilkins went on to declare the sales tax in question invalid and unenforceable. The judgment became final May 16, 2008.

In 2001, the City of Iberia, a city located near Lake of the Ozarks, passed the second of two sales raising the rate of its capital improvement sales taxes to one full percent. The taxpayer, Tonya Sheets, filed suit against the city asserting that Missouri law limited the city to one single capital improvements sales tax at a maximum rate of one-half of one percent.

The court agreed with the taxpayer and invalidated the second sales tax. “The City of Iberia’s sales taxes have been illegally stacked, and Ordinance 2001-01 is invalid and void,” states the court’s judgment.

“This decision will save the taxpayers of mid-Missouri about $300,000 in the next three years alone,” said Tom Burcham, the Farmington attorney who represented the taxpayer.

The judgment also orders the City of Iberia to pay $20,600 to the taxpayer to compensate her for her attorneys’ fees. “Because the court ordered the city to pay my attorneys’ fees, this result was achieved at no cost to any taxpayer who has been forced to pay the city’s illegal tax,” Burcham said.

Burcham is donating the entire fee to charity. “My wife, Leslie, and I have decided to donate all fees from this case to three charities: Parkland Pregnancy Resource Center, Habitat for Humanity, and Young Faith in Christ. It’s a win, win, win.”

Other similar lawsuits remain pending against the city of Ellington and the city of Arcadia.

“In short, these lawsuits challenging illegal sales taxes have been vindicated and proven correct,” said Burcham. “And we will continue the taxpayers’ fight to stop these illegal taxes. This was a big step in the right direction.”