Service-Oriented Industries (Rescinded April 30, 2001)

AUTHORITY: section 144.270, RSMo 1994. This rule was previously filed as rule no. 78 Jan. 22, 1973, effective Feb. 1, 1973. S.T. regulation 010-31 was last filed Dec. 31, 1975, effective Jan. 10, 1976. Refiled March 30, 1976. Amended: Filed Aug. 13. 1980, effective Jan. 1, 1981. Amended: Filed Sept. 7, 1984, effective Jan. 12, 1985. Amended: Filed Oct. 15, 1985, effective Jan. 26, 1986. Rescinded: Filed Oct. 6, 2000, effective April 30, 2001. K & A Litho Process, Inc. v. Department of Revenue, 653 SW2d 195 (Mo. banc 1983). The issue in this case was whether the decision of the Administrative Hearing Commission upholding sales tax on lithographic work performed by the appellant was correct. The court, following its recent decision in James v. TRES Computer Systems, Inc., 642 SW2d 347 (Mo. banc 1982), found that the lithographic process was the nontaxable sale of a technical professional service and that the transfer of ownership to tangible personal property was only incidental. K & A Litho Process received a color transparency from an outside source such as a printer, advertising agency or publishing house and then created a film separation and a color key that the printer, advertising agency or publishing house could use to print the transparency on paper for distribution. Because the color separation and the color key were merely the means of conveying a nontaxable technical service from K & A Litho to its customers, the gross amount paid to K & A Litho was not taxable.