Horton v. Gaddy

John F. Stroud, Justice.

This is a suit to determine if the oil reclaimed from the sediment in the bottom of oil storage tanks should be taxed under the Arkansas Severance Tax statutes. We disagree with the decision of the trial court in its determination that the tax was due.

Appellant has been engaged for many years in the business of cleaning oil field storage tanks in or around Columbia County, Arkansas. After oil has been stored in the tanks, a substance known as BS&W (basic sediment and water) collects at the bottom. When the BS&W in the storage tank builds sufficiently, the tank must be…