Administrative Use Tax Manufacturing Exception

The director of revenue sought review of the Administrative Hearing Commission’s determination finding that Charter Communications was entitled to manufacturing exemptions on use tax paid for replacement equipment for its telecommunications network purchased in 2011 and 2012.

Where the definition of “manufacturing” encompassed activities that transformed an input into an output with a separate use, identity, or value from the input, Charter’s replacement equipment qualified as being used in manufacturing because it transformed a caller’s voice – the input – into a reproduction of the caller’s voice that could be heard through a listener’s phone – the output. The statute did not require the court to find that the replacement equipment had “substantial use” for the purposes of qualifying for the use tax exemption.

Judgment is affirmed.

Charter Communications Entertainment I, LLC v. Director of Revenue (MLW No. 79763/Case No. SC99517 – 14 pages) (Supreme Court of Missouri, Breckenridge, J.) Petition for Review of a Decision of the Administrative Hearing Commission, Slusher, C. (Jeff P. Johnson and Michael E. Talent, Jefferson City, for petitioner) (Matthew J. Landwehr, David M. Mangian, and Janette M. Lohman, St. Louis, for respondent)