DOR Answers Questions

Here are the Department of Revenue's responses to the questions asked by manufacturers at a recent meeting in Neosho, MO, regarding the AIM/TRIM Manufacturing Inputs state sales and use tax (and local use tax) exemption in section 144.054 of SB 30:

• Water used in cleaning products during in the manufacturing process (such as prior to painting, for example) is exempt from state and local use taxes and state sales taxes under the AIM/TRIM Manufacturing Inputs Exemption in section 144.054 of SB 30;
• Water used to cool equipment that is used in manufacturing is a material that is exempt from state and local use taxes and state sales taxes under the AIM/TRIM exemption;
• Coolant used in manufacturing machinery and equipment is exempt from state and local use taxes and state sales taxes;
• Water used in the form of steam or used in chillers in a manufacturing facility is exempt from state and local use taxes and state sales taxes ;
• Warehousing utilities are exempt from state and local use taxes and state sales taxes (even if held to be taxable, warehousing utilities that are part of the manufacturing facility should be covered under the tier system established by DOR, so if 76% or more of the total energy purchased is for manufacturing, the entire energy purchase would be exempt from state and local use taxes and state sales taxes);
• Quality control processes in the manufacturing facility are exempt processes under the AIM/TRIM exemption for state and local use taxes and state sales tax;
• Laboratory materials and supplies used for quality control or other manufacturing processes are exempt from state and local use taxes and state sales taxes;
• Gloves, ear plugs, goggles and other safety equipment are exempt from state and local use taxes and state sales taxes;
• Processes used to preserve products at the production facility are part of the production process and machinery, equipment, materials and energy purchased for use in those processes are exempt from state and local use taxes and state sales taxes;
• Wastewater treatment, both pre- and post-production, would be included as part of the manufacturing process, so chemicals, water, materials, machinery, equipment, etc., would qualify for exemption from state and local use taxes and state sales taxes under the AIM/TRIM exemption;
• Epoxy or other floor coatings would NOT be included as a material used in manufacturing, producing, etc., a product and are NOT entitled to exemption;
• Racks used in the production process are exempt from state and local use taxes and state sales taxes, even if those racks are used to ship the products to customers. The fact they are used in the production process allows them to be included under section 144.054;
• Safety posters would NOT be considered safety equipment and the purchase of such posters would NOT be exempt under section 144.054;
• Warehousing of raw materials is considered to be part of the manufacturing process and energy, machinery and equipment purchased for use or consumption in such warehousing of raw materials would be exempt from state and local use taxes and state sales taxes under section 144.054;
• The purchase of equipment used in a maintenance department of a manufacturing or production facility to maintain other production equipment is entitled to exemption from state and local use taxes and state sales taxes.

As we receive additional information, we will post it here, so please check back often for updates.