In Re the Appeal of LaFarge Midwest/Martin Tractor Co.
271 P.3d 732
| Kan. | 2012Background
- LaFarge Midwest operates a cement plant on private tract in Fredonia, KS, with an adjacent limestone quarry; loaders and haulers stay on the tract and do not leave property; third-party excavator blasts quarry materials not at issue; LaFarge paid sales tax on repair parts to Martin Tractor and sought a refund under 79-3606(kk)(1)(C); Kansas Department of Revenue denied refund; COTA granted summary judgment to LaFarge that the parts and equipment are exempt as integral to the production operation; the Supreme Court affirms, focusing on statutory interpretation of kk and the location requirement.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether loaders/haulers are exempt under 79-3606(kk)(1)(A) as integral to an integrated production operation. | LaFarge: yes, essential to cement production. | KDR: no, used in quarry/preproduction, not at plant. | Exemption applies; equipment used at plant is integral. |
| Whether the equipment must be used at the physical plant location to qualify. | LaFarge: yes, used at the cement plant location. | KDR: not necessarily at plant; location unclear. | Equipment used at the plant or contiguous area qualifies. |
| Whether the plant boundaries extend to contiguous areas at a single fixed location for exemption purposes. | LaFarge: contiguous quarry roads and plant area form a single facility. | KDR: contiguity limited to immediate production area. | Boundaries extend to contiguous areas at the same fixed location; exemption upheld. |
Key Cases Cited
- In re Tax Appeal of Western Resources, Inc., 281 Kan. 572 (2006) (distinguished plant-vs.-use distinction; location requirement for kk exemption)
- Ft. Hays St. Univ. v. University Ch., Am. Ass'n of Univ. Profs., 290 Kan. 446 (2010) (interpretation of statutory provisions; appellate review cannot delete vital provisions)
- Hill v. Kansas Dept. of Labor, 292 Kan. 17 (2011) (doctrine of operative construction rejected; focus on legislative intent)
- In re Tax Exemption Application of Mental Health Ass'n of the Heartland, 289 Kan. 1209 (2009) (strict construction should not yield unreasonable interpretations)
- Padron v. Lopez, 289 Kan. 1089 (2009) (statutory interpretation prioritizes legislative intent and ordinary meaning)
- Redd v. Kansas Truck Center, 291 Kan. 176 (2010) (consideration of act provisions in pari materia to reconcile statutory scheme)