Opinion ID: 1716438
Heading Depth: 1
Heading Rank: 3

Heading: Taxpayer's Contention

Text: The taxpayer points out, however, that traces of the carbon (but about 60% of the original anodes) are found in the bulk containers which contain the final chlorine product. Thus, they view the carbon as purchased for further processing into the chlorine manufactured for sale at retail. Therefore, relying upon the principle that tax statutes should be liberally construed in favor of the taxpayer, the defendant argues that we should adhere to the interpretation by the majority of the court of appeal, namely: Since the carbon (although consumed) is in residue partly included within the final product's bulk, it was purchased for further processing into the chlorine, which (in combination with the carbon oxide residues) was the product produced for sale at retail. The taxpayer's contention is tenable. The literal wording of the definition in the last sentence of La.R.S. 47:301(10) (quoted in full, footnote 3), upon which the taxpayer relies, permits this interpretation namely that, if the substance used in the manufacture enters into the final article produced for resale (however unintended or useless or minutely), the substance can be regarded as purchased for processing into the article produced for sale; and thus as taxable, not to the manufacturer who used the substance, but to the purchaser at retail as the ultimate consumer.