Carfax, Inc. Missouri Cases

Carfax, Inc. appealed the Director of Revenue's assessment of sales and use taxes on equipment used to create Vehicle History Reports (VHRs), arguing the equipment was exempt under manufacturing provisions. The Administrative Hearing Commission (AHC) agreed with Carfax, finding the equipment was used directly in manufacturing VHRs. The Missouri Supreme Court vacated the AHC's decision, holding that Carfax does not "manufacture" VHRs for purposes of the sales and use tax exemption statutes because the process does not transform raw data into a product with a separate and distinct use, identity, or value. The case was remanded for further proceedings consistent with this opinion.