Larry W. Walther

Summary

The court affirmed the judgment holding that proppants used in hydraulic fracturing are taxable-exempt equipment because they are used directly in extracting natural gas, possess sufficient complexity and continuing utility, and perform a necessary mechanical function. It also affirmed that the administrative rule characterizing proppants as nonexempt was invalid and unenforceable as applied because it conflicted with the governing statute. Justice Wynne, dissenting, would have strictly construed the exemption against the taxpayer and reversed.