The Department Of Finance and Administration concluded that equipment used to test wastewater and drinking water was taxable.
A company provided utility services in Arkansas, including water and sewer service. It purchased sensors to use on wastewater and also purchased testing equipment for processing potable water. It paid tax on these purchases and later sought a refund. It claimed that the wastewater sensors were exempt as pollution control equipment. It also argued that the testing equipment was exempt as equipment used to test a manufactured product.
The Department Of Finance and Administration explained that wastewater sensors are taxable because they do not qualify as pollution control equipment. It also concluded that the potable water testing equipment was taxable because treating and cleaning water is not manufacturing.