Sales Tax Articles
Sales Tax State Activity Update - August 2006
Silicon Semiconductors Receive Manufacturing Exemption from Missouri
The Missouri Director of Revenue recently ruled the production of silicon-based semiconductor wafers was a manufacturing process and the purchase of chemicals, gases, materials and replacement machinery directly used in the manufacture of the wafers were exempt from sales and use tax.
The Director concluded the conversion of raw silicone-based wafers into highly conducive wafers demonstrated a separate and distinct use, identity and value from the raw wafer, which qualifies as a manufacturing activity.
Chemicals, gases and materials are exempt when used in a manufacturing stage where they totally or in part become ingredients or components of the final product. Replacement machinery, equipment and parts for machinery and equipment "used directly" in manufacturing stages to produce the wafers were also exempt.
View the full text on the Missouri Department of Revenue website.
(Missouri Director of Revenue Ruling No. LR3070, June 2, 2006)
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