Gaddy v. Hummelstein Iron & Metal, Inc.

George Rose Smith, Justice.

Our compensating (or use) tax law contains an exemption for machinery that is directly used in manufacturing. Ark. Stat. Ann. § 84-3106 (D) (2) (Supp. 1977). The appellee Hummelstein buys and sells scrap metal. The state revenue department ruled that Hummelstein’s machinery is subject to the tax, for the reason that Hummelstein is not engaged in manufacturing. The appellee paid the tax under protest and brought this suit for recovery. This appeal is from a decree holding that Hummelstein is a manufacturer and is therefore entitled to claim the exemption.

The appellee…