Missouri – Taxability of Logs Used in Construction

SALT Report 1440 – The Missouri Department of Revenue ruled that a taxpayer’s purchase of logs that were used in the construction of a winery did not qualify for the agricultural exemption and is subject to Missouri use tax.  The logs were purchased outside of Missouri and brought into the state to build the facility.  The logs were used to construct a wine storage and bottle labeling facility and for the overall expansion of the winery.

Section 144.030.2(22), RSMo, exempts new or used farm machinery and equipment from use tax if:

  • The items are used exclusively for agricultural purposes,
  • On land owned or leased for the purpose of producing farm products, and
  • Are used directly in producing farm products to be sold ultimately in processed form or otherwise at retail or in producing farm products to be fed to livestock or poultry to be sold ultimately in processed form at retail
The Department ruled that the taxpayer met some requirements of the agricultural exemption however, not all of the requirements were met.  Specifically, the logs were not machinery, equipment, or parts used directly and exclusively in the agricultural product process.  Therefore, the taxpayer’s purchases of logs are not exempt under the agricultural exemption and are subject to use tax.
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