Finance and Administration Cabinet v. Rohm and Haas Company
2008-CA-000022
02/06/2009
2009 WL 277054
Opinion by Judge Acree; Judges Clayton and Keller concurred.
The Court affirmed an order of the circuit court which overturned an order from the Board of Tax Appeals upholding the denial of tax refunds claimed by appellees under KRS 139.480(3) for sales and use tax imposed on energy costs.
The Court held that, as a matter of law, each of appellees’ three business operations was separate and distinct from the others for purposes of the statute. The Court distinguished the holding in Schenley Distillers, Inc. v. Commonwealth, ex rel. Luckett, 467 S.W.2d 598 (Ky. 1971) from the holding in Revenue Cabinet, Com. of Ky. v. James B. Beam Distilling Co., 798 S.W.2d 134 (Ky. 1990), and held that Beam was applicable and that the distinction between the various stages of the process of converting crude methyl methacrylate into Plexiglas and emulsions was not at odds with the “integrated plant concept” embraced in Schenley. The Court finally held that appellees did not fail to include the cost of raw materials in the costs of production in the downstream operations, as the costs were factored in the accounting by the upstream operation.
