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Sales tax election can be challenged, appeals court rules

Nearly four years after it was filed, a challenge to a sales tax election in the city of Columbia is about to begin.

The Court of Appeals Western District ruled Nov. 26 that a Boone County circuit judge has authority to review a December 2015 special election that imposed a half-cent sales tax within the Business Loop Community Improvement District in Columbia.

Only 14 registered voters resided within the district’s boundaries at the time of the election, and just seven of them submitted ballots. After the sales tax passed by a vote of 4 to 3, Jennifer Henderson, one of the residents who voted against the tax, filed an election challenge.

Among Henderson’s arguments was that the vote wasn’t conducted by secret ballot and that, because the district itself ran the election, it wasn’t overseen by a neutral administrator. Henderson seeks a declaration that the election was invalid and that the district can’t collect the taxes the election purportedly authorized. The district has been collecting the tax since April 2016.

Jim Layton of Tueth Keeney Cooper Mohan Jackstadt in St. Louis, an attorney for Henderson, said it’s not clear what would become of the three-and-a-half years of taxes the district already has collected if Henderson’s challenge ultimately is successful.

“Election contests for tax elections are rare, which is why we had to go through all of this process to get a court to even hear an election contest,” he said.

Caleb Colbert of Haden & Colbert in Columbia, an attorney for the district, didn’t respond to a message seeking comment.

Shortly before the tax went into effect, district officials has asked Judge Jodie C. Asel to dismiss Henderson’s suit. The judge agreed, but she declined to denominate it as a “judgment,” which prevented Henderson from appealing the ruling. Earlier this year, however, the Missouri Supreme Court said Asel’s dismissal clearly disposed of all the issues in the case, so it ordered her to allow the case to be appealed.

Finally cleared to examine the case, the Western District ruled that Henderson’s case can go forward on the merits, even though she since has moved elsewhere in Columbia and no longer resides in the district’s boundaries.

“Speculation concerning Henderson’s ability to vote in a prospective election in no manner renders it unnecessary for a court to rule upon the allegations of irregularity contained in Henderson’s petition which are directed at a previously held election in which Henderson participated,” Judge Edward R. Ardini Jr. wrote for the court. Judges Mark D. Pfeiffer and Cynthia L. Martin concurred.

The court also said the circuit court has authority to hear the case. Community improvement districts, or CIDs, are political subdivisions of the state that are allowed to hold a sales tax election. The CID statute doesn’t specifically say those elections can be contested, but the Western District said Missouri’s general election laws, which allow “public elections” to be challenged in court, apply to CIDs.

The district’s sales tax election was a public election, the court said, because the voters qualified to participate were those who resided within its boundaries. As a result, “Henderson is authorized to contest the District’s sales tax election under Chapter 115,” Ardini said.

In a footnote, the court pointed out that if no registered voters lived in the district, the law allows those who own property within the district to vote instead. The court declined to say if such an election would fall under the general election laws.

Layton, who previously served as the state’s solicitor general in the Missouri Attorney General’s Office, said the court’s ruling appears to apply broadly.

“The way the court decided the case, it would apply to any kind of special district that requires an election, unless there were something particular about that district that exempted it from the general election law,” Layton said. “Improvement district elections should be subject to judicial review no matter what kind of district it is.”

Henderson also is represented by Richard C. Reuben, a professor at the University of Missouri School of Law.

The case is Henderson v. Business Loop Community Improvement District et al., WD82596.