Missouri Code of State Regulations › Title 12 - DEPARTMENT OF REVENUE › Division 10 - Director of Revenue › Chapter 111 - Sales/Use Tax-Machinery and Equipment Exemptions › Section 12 CSR 10-111.100 - Commercial Printers

Current through Register Vol. 49, No. 14, July 15, 2024
as Defined in Section
				  144.030,
				  RSMo
PURPOSE: Section 144.020.1(1), RSMo, taxes the retail
				  sale of tangible personal property. Section 144.030.2(2), RSMo, exempts
				  materials that become a component part or ingredient of new personal property
				  which is intended to be sold ultimately at retail. Sections 144.030.2(4) and
				  (5), RSMo, exempt certain machinery, equipment, and parts for replacement or
				  for a new or expanded plant. This rule explains the taxation rules for
				  commercial printers and what elements must be met to qualify for these
				  exemptions. This rule does not address the exemption relating to newspaper
				  publishing contained in section 144.030.2(8), RSMo, or the exemption relating
				  to advertising contained in section
				  144.034,
				  RSMo.
(1) In general, sales
				of printed product by commercial printers are subject to tax. Purchases of
				materials and supplies, such as paper and ink, which become a component part or
				ingredient of the printed product are exempt. Other materials used by the
				printer may be exempt if title or ownership to the materials transfers to the
				customer. Purchases of machinery, equipment and parts for replacement or for a
				new or expanded plant are exempt if directly used in the manufacturing process.
				This includes printing presses and plates.
(2) Definition of Terms. See Definition of
				Terms in
				12 CSR 10-111.010
				Machinery and Equipment Exemptions.
(3) Basic Application of Tax.
(A) Sales of printed products-A business
				engaged in printing publications, pamphlets, catalogues, leaflets, advertising
				circulars, stationery and other similar products, is creating new tangible
				personal property and is subject to tax on the total gross receipts from its
				sales. No deductions are allowed for preparing copy, artwork, compositions,
				phototypesetting or any other services or labor that are included in the charge
				to produce the final product.
(B)
				Ingredients and component parts-Purchases of material and supplies such as
				paper and ink may be purchased tax exempt by printers as ingredients or
				component parts under section 144.030.2(2), RSMo.
1. Chemicals that blend with and become part
				of the ink mixture are exempt, including:
A.
				The fountain solution that blends with the ink at the press to keep the
				non-image area clean of ink while printing;
B. Chemicals used on the rollers to keep the
				ink from drying out;
C. Isopropyl
				alcohol to keep the ink wet on the rollers; and
D. Ink anti-stain used to keep the ink from
				bleeding onto other printed material.
(C) Purchases of materials, including film,
				used by the printer in its manufacturing process do not qualify for the sale
				for resale exclusion unless title or ownership to such materials is transferred
				to the customer. Whether title passes is based on the intent of the parties, as
				evidenced by all relevant facts, including written agreements, course of
				dealing or usage of trade and availability of the materials for future use by
				the customer.
(D)
				Chemicals-Chemicals to develop the film and plates are exempt if they become an
				ingredient or component part of materials resold to the customer.
(E) Supplies and Parts.
1. Perforation devices consumed in a single
				production cycle are not exempt as machinery and equipment or parts.
2. Perforation devices benefiting more than
				one production cycle are exempt as parts of machinery and equipment.
3. Blankets and necessary attachments are
				exempt as parts of machinery and equipment.
4. Proof paper and phototypesetting paper are
				not exempt as machinery and equipment or parts.
5. Mineral spirits used as a solvent to clean
				brushes, overspray and equipment are not exempt as ingredients or component
				parts if used as a cleaning solvent separate from the ink. If mixed with the
				ink, then the mineral spirits are exempt as ingredients or component
				parts.