Machinery and Equipment Used to Blend Hog Feed Exempt in Missouri

Wednesday, July 29th, 2015

Farm machinery.

The Missouri Department of Revenue recently ruled that the manufacturing exemption applies to a contractor's purchases of machinery and equipment used to blend hog feed.

The hog feed mill takes various unusable ingredients from a single customer and blends them into useable hog feed (which will then be used by the customer). This process constitutes manufacturing because it consists of altering the ingredients in such a way that a product with a different use, identity, and value is produced from the original ingredients.

This ruling also determined that the farm machinery and equipment exemption does not apply to this machinery and equipment because it is not being used for agricultural purposes.

Additionally, this ruling decided that the contractor's purchases of building materials used in building the hog feed mill are taxable. These items do not qualify as manufacturing or farm machinery or equipment because they are used by the contractor in making real property improvements. As a result, the contractor is considered to be the end user and should pay tax on these materials.

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