Missouri Utility Sales Tax Exemption
Missouri offers a sales tax exemption on utilities such as electricity, gas (natural or propane), water, and other energy sources used directly in manufacturing, processing, compounding, mining, or producing products intended for sale. This exemption is outlined under Mo. Rev. Stat. § 144.054 and applies only when utility usage is essential and predominantly (over 50%) used in qualifying activities.
Utility Study
To claim and support the exemption, a utility study is typically required. The study should:
- Inventory all equipment consuming the utility
- Differentiate between production-related and non-production usage
- Determine the percentage of total utility use attributable to exempt production activities
- Include supporting calculations, diagrams, or schedules as appropriate
Utilities that are not primarily used in exempt activities may be only partially exempt or not exempt at all.
Filing Requirements
To apply for the exemption, businesses must submit Missouri Form 149 Sales and Use Tax Exemption Certificate to your utility provider. The applicable exemption must be specified and be maintained in the seller’s records. If sales tax was paid on qualifying usage prior to submitting the exemption, businesses may seek a refund from the Missouri Department of Revenue. Refund claims can generally cover up to three years of overpaid tax. Businesses should retain all utility bills, exemption certificates, and documentation used in their utility study to support both the exemption and any refund request.