Arkansas Appeals Office Finds Manufacturer’s Machinery Measured Number of Units Produced, Not Sales Tax Exempt

The Arkansas Office of Hearings and Appeals (OHA) Aug. 16 affirmed the Department of Finance and Administration’s sales and use tax refund claim denial. Taxpayer, a manufacturer, purchased tangible property and services to recondition and install machinery in its plant in Arkansas and claimed a refund for tax paid on the purchase based on an exemption for equipment that directly controls or measures the manufacturing process. Taxpayer appealed the refund denial and the OHA found: 1) Taxpayer used the machinery to measure the number of units produced, which was one step removed from the manufacturing process; 2) the machinery didn’t ...