S. H. & J. Drilling Corp. v. Qualls

Frank Holt, Justice.

Appellant, a driller of oil and gas wells, purchased various items from outside the state to replace existing items of a drilling rig, which is used in its drilling operations in Arkansas. Appellee assessed the Arkansas Compensating Tax, commonly referred to as the “use” tax, on the items pursuant to Ark. Stat. Ann. § 84-3105 (Supp. 1977). Appellant contended that the items are exempt under the “replacement” exemption in Ark. Stat. Ann. § 84-3106 (D)(2)(b) (Supp. 1977) and paid the tax under protest. Following a hearing, appellee’s hearing board found that several of the…