Resumen de Kentucky refractories tax: : The shape of things to come?

Industrial Minerals

• Novelis operates a plant in Berea, Kentucky, where it processes aluminium cans and scrap into ingots that are sent to another plant for further processing. The company uses most of the refractory shapes it buys as protective linings for its aluminum smelters.When the taxability of these products was disputed, Novelis argued that refractory shapes are similar to fire brick, which is listed as an industrial supply exempt from sales and use tax, pursuant to state statute KRS [section] 139.470(10), and should be classed as either industrial supplies or machinery for new and expanded industry.

  "At this point, this decision is of no precedential value because it was decided by an administrative body," Erica Horn, one of the attorneys representing Novelis told IM. "Appeals will have to be taken to the Kentucky Court of Appeals before any decision could be precedential in nature, and there is an intermediate step in between. Accordingly, it will be a couple of years before we know anything definitive," she said.

  Novelis qualifies for and receives income tax credit for some of its recycling equipment, according to Horn, however she added that legislation designed to