Missouri License Fee on Gaming Machines

The Missouri Department of Revenue ruled that a mandatory license fee charged to a casino operator by a gaming machine manufacturer for the use of a ticket technology owned by another is subject to sales and use taxes. The license fee that the other company charges the gaming machine manufacturer to enable it to sell a gaming machine utilizing the other company's patented technology to its customer is a cost incurred by gaming machine manufacturer in manufacturing and selling each gaming machine with this technology. Although separately stated on the invoice, the license fee is a gross receipt for the sale of tangible personal property subject to sales tax and is part of the sales price of tangible personal property subject to use tax.