From water to water: A scenic journey to a Supreme Court tax ruling | Arkansas Blog

From water to water: A scenic journey to a Supreme Court tax ruling

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ILLINOIS BAYOU: Treating its water was at the root of a split Supreme Court ruling Thursday.
  • ILLINOIS BAYOU: Treating its water was at the root of a split Supreme Court ruling Thursday.
I can't remember a time I saw an Arkansas Supreme Court opinion that opened so evocatively:

The Illinois Bayou begins on the south slopes of the Ozarks in the Boston Mountains. Its four forks merge and provide Class II/III whitewater canoeing. On its downstream route through Pope County, it passes near the communities of Hector, Scottsville, and Dover before joining Lake Dardanelle in the Arkansas River. Although ideal for canoeing and bass fishing, the waters of the Illinois Bayou and the Huckleberry Creek Reservoir are not suitable for drinking by the residents of Russellville. The waters must first be cleaned. Thus begins this tax litigation. 
The author is Chief Justice Howard Brill.  It's the opinion he wrote in a case concerning a claim by Carrothers Construction Company for a manufacturing tax exemption on some of the equipment it bought for a water treatment plant it built for the city of Russellville. It claimed a sales and use tax exemption by contending the equipment was used for manufacturing. The majority of the Supreme Court held otherwise on the claim for $95,000 and reversed a lower court decision. It held water treatment was not manufacturing. Justice Karen Baker,  who was joined by Justice Courtney Goodson on the losing side in a 5-2 decision, saw things differently, but again with a watery focus:

...  although the majority holds that—“[i]t was water in the beginning, and it was water in the end. Carrothers acquired materials and constructed a facility to treat and clean the water, but it did not manufacture the water”—this holding ignores the details and complexity of the facts in this case. 
TOTAL SCREWUP NOTED: I had this right to begin with. Brill wrote the majority opinion. A reader said later I had it wrong. I did a quick scan, but missed the break between the majority opinion and dissent and wrote an incorrect correction that credited the opening paragraph to the author of the dissent, Justice Baker. Haste makes errors. Sorry about that. Thanks to Timbo for setting me back on course.


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