use tax the facts show that those storage this but those systems are primarily taxable storage equipment and not primarily tax exempt manufacturing i'd like to address the crowd going to systems first section three day ash five friend eighteen of the use tact act exams equipment machinery that is used primarily for manufacturing and i want the size primarily section three dash fifty of the act defines manufacturing as the production of articles and personal property that clearly not me the question there is a closer question with vaporizer which does in fact change the quite a fight gas into gases but for reasons i will explain when you consider the overall process from initial manufacturing to the end user this core should hold that it's not primarily manufacturing equipment but is trying merrily part of the story now section one thirty point three thirty d four of the departments regulations provide that machinery are used for storage or transport prior after completion of the production cycle trades that stand for one proposition that we think this court should hold in our favor which is if the court looked at the entire manufacturing process and that was the manufacturing process that took place in two different locations so in that sense it doesn't apply here but the trays were simply used to ship the rate to her act that's correct in the quarter bill because they serve a protect the function and because it was integrated manufacturing processes that even though they were used for transportation when you look at the overall manufacturing process they were necessary to the manufacturing process to protect parts in transit from one part of  to the other part that is not the same situation here and the reason we don't have that situation here is because under the keystone case which we cited in our brief page eighteen that case dealt with whether there was going to be tax applied on a system that extracted gaseous oxygen nitrogen from the air that case held that the extraction from the air constituted creating tangible personal property that was taxable in other words that under section three to fifty of the used tax act passed it to the manufacturing of gaseous gas us in their manufacturing process they could have purchased their gas use gas directly from the manufacturer as one of the parties in keystone they could have purchased it directly from the party that extracts it from the only economic and functional purpose for using that system is for economics for all storage and boat purchase and storage of gas in liquefied form which is much more actual function in the overall process it is primarily a storage system and the purpose of that storage system functionally and economically this for economical transportation  but certainly for transportation and storage it is economically and functionally easier to use liquid a five year olds so that's our basic argument on why when you clearly tanks we think no question storage taxable and the vaporizers when you look at the cryogenic system as a whole the primary function is for economic well storage transportation in regard to the regulations now the question about whether the fee that they charge to recoup those regulatory costs is taxable does not depend on what transaction they tack the tree on to whether is this case this court case which says that when you're recouping a regulatory cost in the fee there it was the fee that the auto dealer charges to repair the title whether taxable because he specified in the stipulation that those underlying regulations relating to sale yeah but in the sale in the leasing of the tanks and leasing is not a ta the stipulation didn't specify what the underlying regulations were therefore a question of fact you're not entitled to some but was tenth of this that the intent of the stipulation wasn't to remove all these kinds in appendix pages a one of a two if slightly different than the spreadsheets that were in the record itself pages one thirty five one thirty six and the intent attempt to claim that no mo is required to pay sales tax on the hazmat fees any collects in regard to the rental of its high pressure gas cylinders and the other aspect being the claim that you almost should have paid use tax on the approximately one point four million dollars worth of equipment that became components of the christ genic system unlike i'm going to take the other work i think in terms of the sales tax issue and the his math fees everybody agrees is the number of things one is that you'll know here's a number of different aspects to  one of which is the manufacture and sale of medical industrial specialty gases which is of course tangible personal property which is subject to the sales tax and  they as mad fee related to those kinds of transactions and on which they collect sales tax and remitted the state of illinois on the other aspect or one of the other portions of their business is the  pressure cylinders expressed and those rentals of the cylinders are not sales of tangible personal property in fact it's stipulated that they are not sales tangible personal property therefore they are not subject to sales tax and in a very straightforward manner there there is no tax that is due on that particular transaction and you'll note is is a separate item on this non sale transaction has that it does not collect sales tax on that he has not fee that it that he collects from his customers it's clear that the transactions that involve these  cylinders are wholly related to noble customers possession of the gas testers in fact we call the cylinder days the stipulation to try to buy some form of measure scription of of what the tank it is the cylinder is there it is long as the cylinder is in someone's possession there is a twenty four twenty eight cent per d m charge that you don't know charge that customer for having that cylinder in their possession able dealership was charging for those services and the court found that there was an inseparable link because the state statute said to the automobile dealers you must do these steps as part of the sale transaction will be subject to the sales tax that's not what we've got here we've got a fee that is purely and simply a part of a rental of a cylinder for which carbon revenue agrees that transaction is not subject to sales tax yet it tries to cast the hazmat fee which is charged as part of that rental transactions being some kind of of charge on a non existent sale of chaos as i indicated in the brief that particular charge could take the form of so that delivery charge the form of some kind of cylinder the twenty eight thousand two hundred sixteen dollars they then paid under protest as both sales tax the penalties interest by doma the second part of the case as i and his mr mcpike indicates the basically two arguments that the state's making that as to why this should be taxed first argument seems to be that well those cryogenic systems don't manufacture in other words extract the oxygen nitrogen carbon dioxide whatever he says or in the atmosphere they don't physically extract those guesses is part of the manufacturing process of that yes the other argument is he pointed out a set of these are things are nothing more than storage and i would argue to the court that both of those arguments miss the  mark we agree that the cry genic systems do not serve the purpose of extracting gas from the atmosphere but that has an absolutely no relevance is to whether they constitute manufacturing and assembly eighteen of the use tax and it exempts manufacturing and assembling machinery and equipment used primarily in the process of manufacturing or assembling tangible personal property for wholesale or lease or sale and then the act goes on to help explain what manufacturing process means in section three day i shift and explains that many factory process means production of an enjoyable personal property whether the article is a finished product or an article in the process of manufacturing or assembling a different particle of tangible personal property i procedure commonly regarded as manufacturing process in favor kading or refining that changes something existing material into material with a different form use ornate so we have some material we change material maybe the finished product or maybe some component in the finished product and that tangible personal property that comes out in of the process if it's for sale  at retail or wholesale or is for lease if it's within the definition of the the exemption we spent a lot of time in the stipulation going through item by item because we obviously had a lot of customers and we didn't want him forty or fifty customers coming in but we spent a lot of time creating crafting that stipulation to be able to identify who's the  least to in general terms what's the nature of that customer what do they do where is it located is it in illinois that out of state what's the business of the customer let him know personal property this customer cryogenic system leased by you'll know to its customer used for any other purpose or the crytek system used exclusively as part of the customer's manufacturing or assembly process and in each of the stipulated users it is if it's stipulated that is if it is used exclusively in that process now what i presented this to the trial court and my fault is for that were purchased and were installed in the state of missouri never used in the state of illinois and the truck were found that the total cost of this project systems which is about  hundred eighty two thousand dollars that the fourteen thousand four hundred seventy two dollars of use tax penalties and interest that was paid under protest was improperly charged by the of revenue and should be refunded that's a very straightforward question they were never in the state of illinois to be the first place all of the other four pockets were used in the state of illinois on there's a red bucket simply processes and so we conceded to the trial court that those two systems are subject to the status and so the order because not include a refund of those of the t their systems that take liquid oxygen and liquid carbon dioxide in through the control process that will go here in the crowd chanting system produces being processed by the equipment turning out tangible personal property of it on the end of the process which elmo then sells and so if it's squarely within with that they have purchased shipped to their plants and then put into the system and then they are sometimes purely or sometimes it mixtures that are that use the equipment delivered at some point in the manufacturing process whether that is that is welding cutting or are there some food manufacturers that use it for making sure that  edible matters that go into their food or not spoil there are pressure vessels that are tested using nitrogen but in each of those twenty four instances that equipment is the link between material that is not usable in its current form is either liquid nitrogen but our guide into something that is usable in the they take the liquid oxygen that is delivered to their facilities the cryogenic system serves as the link to make what is usable to its patients usable to its patients through the the application the tax penalty and interest be refunded to you almost and in each of the instances involving the cryogenic systems whether they were outside the state of illinois or in any of the other three categories that they were fees don't get taxed here and do get taxed here ok well what regulations are really recovering are they accounting for their ratings or the accounting for they have to separate out which regulatory costs are actually regularly cylinders to audit i believe i looked at that audit in the record and i believe that was the auditors concern but i don't know that that got translated into the stipulation but since the stipulation is deficient that's the law there's nothing in the record they have to go back summary judgment should be reversed that there's a question of fact we can't we can't guess what those regulation of a lot of that stuff are are issues that are not if you want appeals the issue is not what transaction the fee is attached to you can attach it to any the issue is what regulations governing what regulate what was the cost of regulations governing the sale of gas and what was the cost of record of complying with regulations that govern the nontaxable lease  authors are manufactured and clearly the tanks are storage you still have to reverse summary judgment because it was granted the units as a whole and there really isn't anything in the record that i recall