Larry Walther

Summary

The court held that machinery and equipment used to expand a municipal water-treatment plant did not qualify for Arkansas's manufacturing exemption because the treatment process converted raw water into potable water but did not create a new and different article. Applying de novo review and strictly construing tax exemptions against the claimant, the court reversed the summary judgment for Carrothers and remanded for calculation of the actual tax. Justice Karen R. Baker, dissenting, would have affirmed because the complex chemical and mechanical treatment transformed nonconsumable water into consumable drinking water.