- Associated Press - Thursday, May 19, 2016

LITTLE ROCK, Ark. (AP) - The Arkansas Supreme Court says a Kansas company that built an elaborate system to treat water from the Illinois River for use by the city of Russellville isn’t entitled to claim tax exemptions on some equipment it bought for the job.

Russellville’s City Corporation hired the Carrothers Construction Company of Arkansas, which is based in Kansas, to build a three-phase water-treatment system. Carrothers bought machinery for the job and claimed a manufacturers’ tax exemption for some of it.

The Arkansas Department of Finance and Administration said items bought out-of-state didn’t qualify for the exemption and billed Carrothers $94,994.89. Carrothers paid $5,191.16.

Justices said Thursday what the plant does isn’t manufacturing and sent the case back to a lower court with directions to calculate the actual tax due.

Two justices dissented.

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