Sales Tax Articles
Sales Tax State Activity Update - October 2006
Missouri Scours the Laws on Manufacturing Cleaning Chemicals
The Missouri Department of Revenue issued a letter ruling indicating a taxpayer's purchase of chemicals are taxable when used during the manufacture of tangible personal property for sale.
The taxpayer is a parts manufacturer and uses the chemicals in the cleaning of the manufactured parts throughout the manufacturing process. Missouri provides an exemption for machinery, equipment and parts used directly in the manufacture of tangible personal property for sale. Chemicals used in manufacturing are also exempt when they become a component of the manufactured product.
In this instance, the Department concluded the chemicals were taxable because they were not machinery, equipment or parts and did not become a component of the manufactured product.
The full text may be viewed on The Missouri Department of Revenue Website.
(Missouri Department of Revenue, Letter Ruling No. LR3301, August 31, 2006)
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