Sales and use taxes/exemptions:
A state sales tax of 4.225% is imposed on all tangible personal property and taxable retail services, as well as certain leases and rentals. Businesses may deduct 2% of the amount due to the state if paid on time.
A state use tax equal to 4.225% is imposed only when tangible property comes into the state and is stored, used, or consumed in the state. The tax does not apply to items subject to or exempt from sales tax. Businesses may deduct 2% of the amount due if paid on time.
Various communities can adopt a local sales tax generally ranging from 0.5% to 1.5%. A local use tax can also be imposed equal to the city/county local sales tax.
Industrial machinery and equipment:
Exemptions from sales and use taxation are allowed for the following: machinery and equipment used to manufacture a product when purchased to establish a new or expand an existing facility, whether bought in Missouri or in another state; manufacturing machinery and equipment bought to replace similar existing manufacturing machinery and equipment; materials and supplies used to install the categories of exempt machinery and equipment mentioned above; railroad rolling stock used in interstate commerce; pumping equipment and machinery used by common carriers to propel products transported by pipeline; equipment used by common carriers for the manufacture, maintenance, or repair of railroad rolling stock, aircraft, or motor vehicles; and aircraft purchased for use in interstate commerce by common carriers.
Industrial fuels and raw materials:
The following are also exempt from sales and use taxes: materials, goods, parts, and machinery that become component parts of finished products; materials used to produce steel; motor fuel; fuel used by utilities to provide taxable services; and electricity consumed in the manufacturing process, provided the cost of the electricity exceeds 10% of total production costs.
Pollution-control equipment:
Certified machinery, equipment, and devices that abate air or water pollution are exempt from sales and use taxes.
