The Kansas City Chiefs continued their winning streak off the field on Tuesday when the Missouri Supreme Court ruled that it does not owe nearly $1 million in taxes in connection with the $375 million renovation of Arrowhead Stadium more than a decade ago.
In a unanimous ruling, the court overturned a state panel decision ordering the team to pay $930,000 in sales and use taxes on $23 million in purchases it made for the renovation.
The purchases included items like televisions, end-zone scoreboards, video equipment, furniture and a statue of Lamar Hunt, the team’s late owner.
The court ruled that the Chiefs did not owe the taxes because it was not a “purchaser” of the items. Rather, it said, Jackson County was the purchaser.
Although the Chiefs’ landlord, the Jackson County Sports Complex Authority, had granted the team exemptions on the taxes, a state audit in 2014 concluded the exemptions had been improperly used for items like leotards for cheerleaders. It found that such items did not come within the public purpose of fixing up the stadium.
The Chiefs argued that the $125 million it contributed to the renovation actually went into a fund controlled by the sports authority and therefore the team had no control over the money. But the Missouri director of revenue contended that, because the Chiefs were listed as the owner on purchase orders and chose the items in question, the team was responsible for the taxes.
The Supreme Court disagreed, finding that the money used for the renovation project, including tax credits, belonged to the sports authority, not the team.
“This Court is not free to simply ignore the laws governing donations and the relevant tax statutes because the Director does not like the fact that the team ultimately benefited from the project the team helped fund,” Judge Laura Denvir Stith wrote for the court.
“This Court cannot substitute its judgment for that of the legislature that such projects serve an overarching public purpose."
The Chiefs agreed to a 25-year extension of its sublease of Arrowhead in return for the stadium’s renovation. Taxpayers kicked in the majority of the funding, $250 million, through Jackson County sales taxes.
The Chiefs’ court victory comes four months to the day after the team won Super Bowl LIV, defeating the San Francisco 49ers 31-20 after trailing 20-10 at the end of the third quarter. It was the Chiefs’ first Super Bowl win in 50 years.
Kansas City attorney Michael T. White, who represented the sports authority in the case, said the law was clear.
“The Chiefs did not acquire any title to any of this property and that they had not paid for any of it,” White said. “The Department (of Revenue) tried to make the argument that because the Chiefs were granted tax credits, the use of those tax credits to buy anything would’ve been a purchase by the Chiefs. But the Court recognized that the Chiefs had given up all control.”
Chiefs officials could not immediately be reached for comment.
