IBM Corp. v. Dir. of RevenueAnnotate this Case
In 2012, IBM Corp. filed a use tax return for its sales of hardware and software to MasterCard International, LLC for MasterCard’s use in processing credit and debt card transactions, claiming that the equipment it sold to MasterCard was exempt from use tax because MasterCard’s activities qualify as “manufacturing” under Mo. Rev. Stat. 144.054.2. The Administrative Hearing Commission granted IBM a refund, finding that MasterCard’s use of the hardware and software qualified as “manufacturing a product” as that term is used in the tax exemption set out in the statute. The Supreme Court reversed, holding that MasterCard’s use of the hardware and software does not qualify as the “manufacturing of any product” under section 144.054.2, and therefore, IBM is not entitled to an exemption from use tax.