Missouri Discusses the Taxability of Equipment and Food Used in Pharmaceutical Research

The Missouri Department of Revenue recently determined that a taxpayer’s purchase of laboratory and medical monitoring equipment were exempt from sales and use tax. The taxpayer conducts contract research for pharmaceutical companies through a variety of studies that require special laboratory and medical monitoring equipment. Some of the studies require the study participants to be housed and provided food in accord with the testing protocols established by the pharmaceutical companies. Since the equipment is being used or consumed directly and exclusively in the research and development of prescription pharmaceuticals consumed by humans, it may be purchased exempt from sales tax. However, the food and food serving products purchased for study participants may not be purchased exempt from sales tax because they are not used directly or exclusively in the research and development of prescription pharmaceuticals consumed by humans. (Letter Ruling No. LR5848, Missouri Department of Revenue, August 20, 2009)

Posted on October 20, 2009