Larry W. Walther

Summary

The court affirmed the judgment holding that proppants used in hydraulic fracturing are exempt equipment because they possess sufficient complexity and continuing utility, are used directly in extracting oil and gas, and cause a necessary mechanical action. The court also held that the administrative rule classifying proppants as nonexempt was invalid and unenforceable as applied because it conflicted with the governing statute. Justice Wynne, joined by the chief justice and Justice Danielson, dissented and would have applied a strict construction against the tax exemption and upheld the rule.