Missouri Code of State Regulations › Title 12 - DEPARTMENT OF REVENUE › Division 10 - Director of Revenue › Chapter 110 - Sales/Use Tax-Exemptions › Section 12 CSR 10-110.600 - Electrical Energy, as Defined in Section 144.030, RSMo

Current through Register Vol. 49, No. 14, July 15, 2024
PURPOSE: Section 144.030.2(12), RSMo exempts from tax
				  certain purchases of electrical energy used in primary or secondary
				  manufacturing, processing, compounding, mining or producing a product, or
				  processing of raw materials that contain recovered materials. Section
				  144.030.2(31), RSMo exempts from tax electricity used in connection with the
				  manufacturing of cellular glass products or in any material recovery processing
				  plant. Section 144.030.2(33), RSMo exempts from tax utilities used or consumed
				  directly or exclusively in the research and development of agricultural
				  biotechnology products and plant genomics products and prescription
				  pharmaceuticals consumed by humans or animals. This rule explains when these
				  exemptions apply and how a taxpayer may claim the exemptions at the time of
				  purchase of the electrical energy.
(1) In general, electrical energy used in
				facilities owned or leased by the taxpayer in the actual primary manufacturing,
				processing, compounding, mining or producing of a product is exempt from tax if
				the cost of the electrical energy used exceeds ten percent (10%) of the total
				cost of the primary manufacturing, processing, compounding, mining or
				producing, exclusive of the cost of electrical energy so used. Electrical
				energy used in facilities owned or leased by the taxpayer in the actual
				secondary manufacturing, processing, compounding, mining or producing of a
				product is exempt from tax if the cost of the electrical energy used exceeds
				ten percent (10%) of the total cost of the secondary manufacturing, processing,
				compounding, mining or producing, exclusive of the cost of electrical energy so
				used. Electrical energy used in a material recovery processing plant owned or
				leased by the taxpayer or in manufacturing cellular glass products is exempt
				from tax. Utilities used or consumed directly or exclusively in the research
				and development of agricultural biotechnology products and plant genomics
				products and prescription pharmaceuticals consumed by humans or animals are
				exempt from tax. Electrical energy used in facilities owned or leased by the
				taxpayer in processing raw materials that contain at least twenty-five percent
				(25%) recovered materials is exempt from tax.
(2) Definition of Terms.
(A) Compounding-Producing a product by
				combining two (2) or more ingredients or parts.
(B) Fabrication-See
				12 CSR
				10-111.010.
(C) Manufacturing-See 12 CSR
				10111.010.
(D) Material recovery
				processing plant-
See
				  12 CSR
				  10-111.060.
(E) Mining-See
				12 CSR
				10-111.010.
(F) Primary processing-Manufacturing,
				processing, compounding, mining or producing that results in the first
				marketable product.
(G)
				Producing-See
				12 CSR
				10-111.010.
(H) Product-An item with a new identity, use
				and market value produced by the taxpayer's efforts which is intended at the
				time of the production activity to be sold ultimately for final use or
				consumption. A product may be tangible personal property or a service, if the
				property or service is subject to state or local sales or use taxes, or any tax
				that is substantially equivalent thereto, in this state or any other
				state.
(I) Production
				activity-Manufacturing, processing, compounding, mining, producing or
				fabricating.
(J) Raw material-any
				ingredient or component that becomes part of, or is made into a finished
				product.
(K) Recovered
				materials-See 12 CSR 10111.060. In order for an item to be a recovered
				material, a facility must recover it from the solid waste stream. An item used
				in processing for its original intended purpose is not a recovered
				material.
(L) Secondary
				processing-Further processing or fabricating of a marketable product that
				results in another marketable product.
(M) Solid waste-See
				12 CSR
				10-111.060.
(N) Total cost-All allocated costs incurred
				in producing the product, including all elements of production cost in
				accordance with generally accepted accounting principles.