Mo. Code Regs. tit. 12 § 10-110.201
Current through Register Vol. 49, No. 21, November 1, 2024.
Section 12 CSR 10-110.201 - Materials and Other Goods Used or Consumed in Manufacturing, as Defined in Section 144.054, RSMoPURPOSE: Section 144.054.2, RSMo, exempts from state tax and local use tax, but not local sales tax certain materials, goods, machinery and parts. This rule explains the requirements for this exemption.
(1) In general, purchases of electricity, gas (natural, artificial, or propane), water, coal, and energy sources, chemicals, machinery, equipment and materials that are used or consumed in the manufacturing, processing, compounding, mining or producing a product are exempt from state tax and local use tax, but not local sales tax. Local sales tax applies to these transactions.(2) Basic Application of Exemption. (A) Electricity, gas (natural, artificial, or propane), water, coal, and energy sources, chemicals, machinery, equipment and materials that are used or consumed in manufacturing, processing, compounding, mining or producing a product are exempt from state tax and local use tax, but not local sales tax. It is not necessary for the item purchased to be used directly in manufacturing, processing, compounding, mining or producing a product in order to qualify for the exemption.(3) Examples. (A) A toy manufacturer purchases sandpaper to use in the manufacturing of wooden rocking horses. The purchase of sandpaper is exempt from state tax and local use tax, but not local sales tax because it is a material that is consumed in producing a product.(B) An automobile manufacturer purchases soap to wash all automobiles as they leave the manufacturing plant. The soap qualifies as a material used or consumed in manufacturing and is exempt from state tax and local use tax, but not local sales tax.(C) A steel fabricator purchases gases for use in fabricating a product out of steel plates. The gases that are consumed in the fabrication process are exempt from state tax and local use tax, but not local sales tax, because they are consumed in producing a product.(D) A foundry creates a steel product by casting molten steel. After casting, a cleaning solution is poured over the product to remove impurities from the surface. The solution is used or consumed in the producing of a product and is exempt from state tax and local use tax, but not local sales tax.(E) A metal container manufacturer purchases coolants, hydraulic fluids, greases and oils for use in machines that are used to shape the product. Catalysts and acids are also purchased to interact with and clean the product being manufactured. The coolants, hydraulic fluids, greases, oils, catalysts and acids are exempt from state tax and local use tax, but not local sales tax. AUTHORITY: section 144.270, RSMo 2000 * Emergency rule filed Aug. 14, 2007, effective Aug. 28, 2007, expired Feb. 23, 2008. Original rule filed Aug. 14, 2007, effective March 30, 2008. *Original authority: 144.270, RSMo 1939, amended 1941, 1943, 1945, 1947, 1955, 1961.