A Missouri Hearing Commission found that telephone system components were eligible for the Missouri manufacturing exemption from use tax. The Missouri Supreme Court had previously ruled that the telephone service qualified as the manufacturing of a product and referred the case to the Administrative Hearing Commission to decide if the purchased equipment qualified for the manufacturing exemption. The Commission found that the equipment did qualify for the exemption and the company in question was entitled to a refund of tax paid. (Southwestern Bell Telephone Co. v. Director of Revenue, Missouri Administrative Hearing Commission, No 97-0923 RV, October 28, 2004)
UPDATE: Missouri has enacted legislation clarifying that the state’s manufacturing exemption includes certain telecommunications services.