Items Used or Consumed by Commercial Printers, as Defined in Section 144.054, RSMo

PURPOSE: Section 144.054.2, RSMo exempts from state tax, but not local tax, machinery, equipment, materials and chemicals used or consumed in manufacturing, processing, compounding, mining or producing any product or used in research and development related to manufacturing. This rule explains the taxation rules for commercial printers and what elements must be met to qualify for these exemptions. (1) In general, purchases of machinery, equipment, materials and chemicals used or consumed by a printer in the production process are exempt from state tax and local use tax, but not local sales tax. (2) Definition of Terms. See definition of terms in 12 CSR 10111.010 Machinery and Equipment Exemptions. (3) Basic Application of Tax. (A) Purchases of material and supplies used in the printing process that do not blend with the ink are exempt from state tax and local use tax, but not local sales tax, including antistatic products used to reduce static on the printed product, chemicals used to clean the presses and color wax used for layout purposes. (B) Chemicals to develop the film and plates are exempt from state tax and local use tax, but not local sales tax. Chemicals exempt from state, but not local tax include chemicals used on plates to desensitize the plates and to prevent them from oxidizing, developers, replenishers, finishers, fixers, store gum and plating solution. (C) Perforation devices consumed in a single production cycle are exempt from state tax, but not local tax as machinery and equipment used or consumed in the printing process. Proof paper and phototypesetting paper are also exempt from state tax, but not local tax as machinery and equipment used or consumed in the printing process. Mineral spirits used as a solvent to clean brushes, overspray and equipment are exempt from state tax and local use tax, but not local sales tax even when used as a cleaning solvent separate from the ink. (4) Example. (A) A commercial printer purchases phototypesetting paper, developer chemical for plates, film (which does not become the property of the customer) and press cleaning solvent that is not mixed with ink. All these items are exempt from state tax and local use tax, but not local sales tax as materials used or consumed in producing a product. AUTHORITY: section 144.270, RSMo 2000 and section 144.054, RSMo Supp. 2007.* Emergency rule filed Aug. 14, 2007, effective Aug. 28, 2007, expired Feb. 23, 2008. Original rule filed Aug. 14, 2007, effective Feb. 29, 2008. *Original authority: 144.054, RSMo 2007 and 144.270, RSMo 1939, amended 1941, 1943, 1945, 1947, 1955, 1961.