Mo. Supreme Court rules against Krispy Kreme

The Missouri Supreme Court ruled against Krispy Kreme Doughnuts Inc.’s argument it should pay less taxes because of the way customers consume its products.

The ruling requires Krispy Kreme to keep paying the higher 4 percent sales tax applying to restaurant sales, rather than the 1 percent tax that grocery stores pay.

According to Krispy Kreme, the majority of its doughnuts are not eaten at the company’s stores. Further, the chain maintained its sale of items not prepared at the store, including water, juice, soft drinks, milk, and bags of coffee beans or ground coffee, qualified it for the lower tax.

Krispy Kreme submitted a refund claim of $277,992 to the state of Missouri, but it was denied by the Missouri Department of Revenue's Administrative Hearing Commission. Krispy Kreme appealed the case, which led it to the Missouri Supreme Court.

The court ruled Krispy Kreme operates more like a restaurant than it does a grocery store.

"They are best described as places in which meals or drinks are regularly served to the public, and its sales are intended to be taxed at the higher rate,” Justice Zel Fischer wrote in the court's opinion.

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