Department of Revenue v. Indian Head Mining Co., Inc.
Decision Date | 19 March 1976 |
Parties | DEPARTMENT OF REVENUE, Commonwealth of Kentucky, Appellant, v. INDIAN HEAD MINING COMPANY, INC., et al., Appellees. |
Court | United States State Supreme Court — District of Kentucky |
William S. Riley, Asst. Atty. Gen., william P. Sturm, Atty., Legal Staff, Dept. of Revenue, Frankfort, for appellant.
A. P. Gullett, Cooper, Gullett, Combs & Engle, Hazard, for appellees.
The question here is whether a piece of equipment used in connection with a coal-mining operation is exempt from the use tax (KRS 139.310) under KRS 139.480(8) and KRS 139.170.
KRS 139.480(8) excludes from the tax 'Machinery for new and expanded industry,' which is defined by KRS 139.170 as 'that machinery used directly in the manufacturing process,' etc.
The appellee is engaged in a form of deep-mining called 'punch-mining.' A bulldozer and end-loader, or 'wheel loader,' are used to clear the overburden from a seam of coal, which is then undercut, blasted loose, and removed to a dumping point outside the mine entrance, where the wheel loader is used to pick up the coal and put it into trucks. The coal is thence hauled by truck to the tipple for cleaning, sizing and ultimate shipment by rail to the appellee's customers. The Board of Tax Appeals held (emphasis added) This order was upheld on appeal to the Franklin Circuit Court, following which this court granted a motion for appeal by the Department of Revenue.
KRS 132.200, which pertains to ad valorem taxes, excludes certain classes of property from local taxation. One of these is: 'Machinery and products in course of manufacture, of individuals or corporations actually engaged in manufacturing,' etc. In Colley v. Eastern Coal Corporation, Ky., 470 S.W.2d 338, 340 (1971), this court held that the process by which coal is cleaned, sized and made ready for marketing does not constitute 'manufacturing' within the meaning of that statute, because ...
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Department of Revenue v. State Contracting & Stone Co., Inc.
...Schenley Distillers, supra, is in point here. We think the Kentucky Supreme Court's recent decision in Department of Revenue v. Indian Head Mining Co., Inc., Ky., 534 S.W.2d 805 (1976) is controlling. The controversy in Indian Head, supra, centered around a wheel loader the function of whic......