PURPOSE: This rule interprets and applies section 144.605(6), RSMo. Deductions are not allowed for costs of doing business.

1. (1) The factor for determining whether labor charges are taxable is, if they become a part of or are incorporated into the agreed purchase or selling price of the property. No deductions are allowed the vendor for labor which is part of the production cost of any property which is to be sold at retail. The costs of doing business, such as raw materials consumed and labor to assemble, under no circumstances are deductible.

AUTHORITY: section 144.705, RSMo (1994).* U.T. regulation 605-10 originally filed Oct. 28, 1975, effective Nov. 7, 1975. Refiled March 30, 1976. *Original authority 1959. Management Services, Inc. v. Spradling, 547 SW2d 466 (Mo. banc 1977). Changes for out-of-state laboratory services were not incidental to film production and were therefore not subject to use tax.