Missouri – Distributor’s Purchase of Packaging Machinery Not Exempt

SALT Report 1584 – The Missouri Department of Revenue issued a Letter Ruling regarding the taxability of a Taxpayer’s purchase of packaging machinery and equipment.  The Taxpayer is a distributor of metal bar, tubular, and plate products that he cuts to meet his customer’s specifications.  The Taxpayer purchased the packaging machinery in question, to bind multiple items together that were ordered by, and shipped to, a particular customer.
Since the Taxpayer simply purchases metal bars, tubes and plating and cuts them to meet his customer’s specifications he does not meet the minimum standard of a manufacturer because he does not create a new and distinct item different from the original product.
Based on the above circumstances the Department determined that the Taxpayer’s purchase of packaging machinery is not exempt from sales tax because the Taxpayer is not considered a manufacturer in the state as defined in Missouri Code 12 CSR 10-111.010(2)(E) and the packaging machinery and equipment the Taxpayer purchased cannot be considered “used in manufacturing.”
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